Discover Future Solutions Annual Report 2012 Contents

FOLD-OUT PAGE GROUP FINANCIAL STATEMENTS Contents 37 Group Income Statement Key Financials 38 Group Statement of Comprehensive Income 39 Group Statement of Financial Position COMPANY 40 Notes to Group Financial Statements 02 Letter to Shareholders 71 Group Statement of Cash Flows 06 Report by the Supervisory Board 72 Group Statement of Changes in Equity 10 Stock Performance and Capital Markets 74 Details of Shareholdings 11 Governing Bodies at SIMONA AG 75 Auditorʼs Report 14 Milestones 76 Other Information 16 Commitment 18 Projects OTHER DETAILS 77 Shareholdings of SIMONA AG GROUP MANAGEMENT REPORT 78 Imprint 22 Business Activities and General Conditions 79 Financial Calendar 26 Financial Performance 80 SIMONA worldwide 27 Financial Assets and Liabilities 81 SIMONA Product Categories 28 Financial Position 28 Events after the Reporting Period 28 Risk Report 29 Report on Expected Developments 30 Other Information 30 – Employees 31 – Significant elements of the internal control and management system 32 – Quality, environment and energy 32 – Compensation Report 34 – Disclosures pursuant to Sections 289 (4) and 315 (4) HGB and explanatory report 35 – Forward-looking statements and forecasts 35 – Closing statement

In touch with the future

SIMONA is recognised as one of the world’s leading manu facturers of semi-finished thermoplastics, piping systems and finished parts. Our team of more than 1,200 employees brings together best-in-class expertise and an unrivalled passion for customer service, while our portfolio of 35,000 items represents one of the most extensive and diverse product ranges worldwide.

In our quest to become a market leader in plastics processing, we will continue to hone our skills as an innovator and take product development forward to the next level. This will include the use of new materials and material combinations aimed at further improving the properties of our plastic products. For more safety, efficiency and sustainability.

Discover Future Solutions! Key Financials

SIMONA GROUP*

2012 2011 2010 Revenue €m 293.2 308.5 267.4 Year-on-year change % –5.0 15.4 24.3 of which abroad €m 200.1 203.9 176.8 of which abroad % 68.2 66.1 66.1 Staff costs €m 57.6 58.6 55.9 Profit before taxes (EBT) €m 14.8 20.7 10.5 Profit for the year €m 11.5 16.2 7.2 Net cash from operating activities €m 21.3 23.4 3.1 EBIT €m 13.8 19.8 10.1 EBIT % 4.7 6.4 3.8 EBITDA €m 25.3 31.7 22.7 EBITDA % 8.6 10.3 8.5

Total assets €m 260.1 257.1 245.0 Equity €m 180.7 174.6 162.2 Non-current assets €m 92.1 90.5 89.4 Investments in property, plant and equipment €m 13.5 12.5 6.5 Employees (annual average) 1,247 1,248 1,218

* Based on IFRS

STOCK DATA

2012 2011 2010 Earnings per share € 19.07 26.96 12.00 Dividend € 7.50 9.50 6.50 Dividend yield % 2.4 2.9 2.1 P/E ratio* 16.1 12.2 26.3 Market capitalisation-over-equity ratio* 1.02 1.13 1.17 Share price as at Dec. 31 € 307.00 327.69 315.00

* Each calculated on Group basis EBIT PERFORMANCE SIMONA GROUP (in €m) REVENUE BY PRODUCT GROUP SIMONA GROUP (in €m)

215.0 19.8 229.4 (–6.3 %)

13.8 78.2 (–1.1 %) 6.4 % 79.1 10.1 4.7 %

Semi-finished and finished parts 3.8 % Proportion of revenue: 73.3 % 2012 2011 2012 Pipes and fittings 2012 2011 EBIT margin Proportion of 2011 (per cent) 2010 revenue: 26.7 %

REVENUE BY REGION SIMONA GROUP (in per cent)

2011 2012

Asia, Americas and Australia: Asia, Americas and Australia: 16.8 % 18.4 %

Germany: Germany: 33.9 % 31.8 %

Rest of Europe and Africa: Rest of Europe and Africa: 49.3 % 49.8 % 2

“We aim to increase our revenue share in the emerging markets to at least 25 per cent in the medium term and are currently directing our investment spending at growth regions in Asia, Eastern Europe and Latin America.”

WOLFGANG MOYSES CEO, Chairman of the Management Board COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 3 Letter to Shareholders

Dear Shareholders,

The financial year just ended produced a number of chal- Despite the above-mentioned challenges, the year under lenges for SIMONA. The economic climate was plagued by review also saw a number of positive developments. We came uncertainty, with the unresolved sovereign debt crisis in up with a new concept aimed at further improving our Europe adversely affecting confidence levels within the global operational processes. This applies to the efficiency of ma- business arena. Against this backdrop, the market saw a sig- terials usage as well as energy consumption and production nificant downturn in capital expenditure on machinery and output. A new extrusion machine for PVC products will help to equipment. A low propensity to invest tends to have a severe improve our cost structures in this segment. We also made impact on SIMONA’s core business. In Central and Western four key managerial appointments in the areas of Develop Europe, we saw a decline in the overall volume of sales relat- ment, Technology and Sales during the period under review. ing to plastic sheets used in chemical tank and equipment In establishing the SIMONA Sales Academy, we have expand- construction as well as in the field of mechanical engineering. ed our global training and educational programme. Last but Additionally, sales generated within the solar energy and not least, the high scores achieved as part of our staff satis- photovoltaics industry, which had produced a boom in 2011, faction survey have reaffirmed the appeal of our company as slumped almost completely in the period under review. an employer.

By contrast, business development proved more favourable Looking forward, 2013 is unlikely to see any fundamental in the emerging markets. Compared to the previous year, changes within the wider business environment. We will place we succeeded in increasing our revenue in the sales regions of our processes and structures under close scrutiny and lever- Asia. This was attributable partly to an automotive contract age cost savings in Europe wherever possible. One of our main secured by the company in China during the year under review. priorities will be to expand our business beyond Europe. Meanwhile, our subsidiary in North America managed to turn around its business over the course of 2012. Our new subsidi- 2013 is a “K” year. The world’s largest plastics trade fair is ary in Russia commenced operations in the year just ended, a particularly important event for our company. Presenting the objective being to better exploit the significant growth itself as an innovative, future-oriented company, SIMONA will potential in this region through our local presence. We aim to unveil a number of new product developments. To whet your increase our revenue share outside Europe to at least 25 per appetite, this report includes an overview of various exciting cent and are currently directing our investment spending projects implemented in cooperation with our customers at growth regions in Asia, Eastern Europe and Latin America. over the course of the year.

Overall, we fell just short of achieving our revenue target of € 300 million within the Group. As for earnings, we can only be partially satisfied with our performance in the year under review. At 4.7 per cent, our EBIT margin is slightly below the figure of 5 per cent targeted for 2012. This was attributable WOLFGANG MOYSES primarily to the contraction in sales revenue. CEO, Chairman of the Management Board

More Safety More chemi making the transpor ards inthis area, with the express purpose of SIMONA iscommitted to setting new- stand aggressive substances. have to withstandextreme conditionsand In future, for example, SIMONA in industrial applications,SIMONA Safety plays apivotal role Used atSIMONA. gas pipelines. gas forced coextruded layers couldbedeployed in new oiland cal mediaeven safer and more efficient. tation andstoragetation of ® Multilayer Pipes with rein- ® products

Foto: Fotolia

Report by the Supervisory Board

DR. ROLF GOESSLER Chairman of the Supervisory Board

SIMONA’s business performance in 2012 was adversely affect- From the Supervisory Board’s perspective, the overall outlook for ed by the difficult economic conditions witnessed throughout the financial year 2013 is subdued. The economic climate may Europe, as a result of which the company failed to meet its at least improve slightly for Germany and some of the other euro- revenue and earnings targets. After the tremendous success zone countries. SIMONA has set itself ambitious goals. Main of 2011, the company was unable to buck the general trend taining a close dialogue with the Management Board, the Super and generate growth over the course of the year under review. visory Board will focus its activities in particular on achieving a Sluggish investment spending on the part of companies satisfactory bottom-line result. We believe that the medium-term operating in Europe’s mechanical engineering and chemical growth prospects for polymer applications, a market served by industry proved particularly detrimental to business. By SIMONA with an extensive product range, are promising. Pursuing contrast, SIMONA succeeded in further cementing and extend- a strategy that includes stepping up its product development, ing its position beyond the borders of Europe. The company’s SIMONA is well placed to exploit this potential at an international turnaround in the United States is particularly encouraging. level. Elsewhere, SIMONA recorded a significant year-on-year increase in revenue within the sales region of Asia. The new subsidiary COOPERATION WITH THE MANAGEMENT BOARD in Russia successfully commenced operations. In summary, the Over the course of the 2012 financial year, the Supervisory Board action plan for international expansion agreed by the Manage discharged its duties under statutory provisions and the company’s ment Board and the Supervisory Board points in a clear direction Articles of Association, advised the Management Board and senior and is bearing fruit. staff on a regular basis and evaluated and monitored management’s activities. It also conducted an assessment of the company’s Against the backdrop of lower revenue, SIMONA can only be risk management and compliance procedures and came to the partially satisfied with its earnings performance. The Manage conclusion that the system implemented meets the requirements ment Board has initiated measures for a structural improve- to the fullest extent. ment in earnings, the aim being to bring down the break-even point. The Supervisory Board endorses these measures and will The Management Board and Supervisory Board engaged in dia- monitor their implementation. logue concerning the strategic direction of the company and COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 7 Report by the Supervisory Board

regularly discussed the status of strategy implementation. The SUPERVISORY BOARD MEETINGS Supervisory Board was directly involved in all decision-making The Supervisory Board convened four scheduled meetings over processes of fundamental importance to the company. The the course of 2012 and one constitutive meeting following the Management Board informed the Supervisory Board as part of new appointment of the Supervisory Board members to be regular written and verbal reports, furnished in a timely and elected by the shareholders at the Annual General Meeting of comprehensive manner. The reports focused in particular on 22 June 2012. issues relating to corporate planning, the strategy, the course of business and the position of SIMONA AG and its subsidiar- At the meeting held on 6 March 2012, the Supervisory Board ies, including the risk situation, risk management, compliance focused mainly on the annual report 2011, the progression of and transactions of significant importance to the company. At business during the first two months of 2012 and the outlook the same time, the Management Board outlined any deviations provided for the financial year as a whole. Additionally, the between specified targets and the actual course of business, Supervisory Board informed itself of the development of busi- elucidated them in full and explained any countermeasures ness in Asia – specifically about the situation relating to negoti- taken to rectify the situation. The content and scope of reports ations with a key account for the Chinese market – as well as furnished by the Management Board met the requirements of the reorganisation of the company’s business model in the set out by the Supervisory Board. In addition to the above- United States. Beyond this, the Supervisory Board requested mentioned reports, the Supervisory Board asked the Manage information on various development projects and benchmark- ment Board to provide supplementary information relating ing activities regarding the production sites around the globe. to certain issues. In particular, the Management Board was The Supervisory Board also discussed the dividend proposed to available at Supervisory Board meetings for the purpose of the Annual General Meeting of Shareholders. At this meeting, discussing specific points and answering any questions put the Supervisory Board also informed itself of the current status to it by the Supervisory Board. Transactions requiring the of efforts to restructure the company’s occupational pension Supervisory Board’s consent were discussed and examined provision. thoroughly in cooperation with the Management Board, focus- ing particularly on the benefits and effects of these trans At its meeting of 19 April 2012, the Supervisory Board dealt actions. Where required, the Supervisory Board also convened with the consolidated financial statements, the annual financial without the Management Board being present. statements of the parent as well as the Group management report and the management report of SIMONA AG for the finan- The Chairman of the Supervisory Board was also kept fully cial year 2011, the proposal by the Management Board for informed in between meetings convened by the Supervisory the appropriation of distributable profit generated in the finan- Board and its committees. For example, the CEO and the cial year 2011 and the result of the year-end audit conducted Chairman of the Supervisory Board met regularly to discuss by Ernst & Young GmbH, Wirtschaftsprüfungsgesellschaft. SIMONA’s strategy, current progress in business and risk man- The meeting was attended by the auditor, who reported in agement, as well as other key topics and decisions that arose. detail on the results of the audit. The Supervisory Board was Additionally, the Chairman of the Supervisory Board con- thus able to satisfy itself that the audit had been conducted ducted one-to-one meetings with the other members of the in a proper manner. At the same meeting, the Supervisory Management Board for the purpose of discussing specific Board approved the results of the audit. Having concluded its issues relating to their departments. The CEO informed the examination in full, the Supervisory Board raised no objec- Chairman of the Supervisory Board without delay of all tions to the annual financial statements of the parent and the important events that were significant in the assessment of consolidated financial statements or the management report SIMONA’s state of affairs and progress or for the manage- and Group management report for the 2011 financial year; ment of the company. the accounts were thus approved by the Supervisory Board; 8

the report by the Supervisory Board was passed. It assessed Management Board and passed a resolution on the intro and endorsed the Management Board’s proposal for the duction of a long-term incentive plan for a variable component appropriation of profits. At this meeting, the Supervisory of Management Board compensation. The Supervisory Board Board also passed the proposals in respect of the election to also informed itself of the company’s business performance be held for the Supervisory Board as well as the agenda for in the third quarter and discussed the budget and investment the 2012 Annual General Meeting. Additionally, it informed plan presented by the Management Board in respect of itself of the company’s business performance during the first the financial years 2013 to 2016. Other topics discussed at quarter of 2012. Other items on the agenda were the opera- this meeting included business performance in the United tional stability of the plant in the United States as well as States and in China as well as progress made at the newly the company’s positioning within the North American market established subsidiary in Russia. and progress made by the plant in China. At this meeting, the Supervisory Board also discussed the restructuring of the COMMITTEE WORK company’s occupational pension provision. Following the unani- The Supervisory Board is assisted by the Audit Committee and mous appointment of the Supervisory Board members to be Personnel Committee. Both committees regularly provide the elected by the shareholders at the Annual General Meeting of Supervisory Board with extensive information relating to their SIMONA AG on 22 June 2012, the new Supervisory Board held activities. The Audit Committee is responsible primarily for its constitutive meeting on the same day. At this meeting, the issues relating to the supervision of the accounting process, newly elected employee representatives, Mr. Andreas Bomm and the efficacy of the internal control system and the internal Mr. Gerhard Flohr, were also in attendance for the first time. auditing system, year-end auditing, with a particular focus on the independence of the auditor, the additional services pro- At the same meeting, the Supervisory Board unanimously vided by the independent auditor, the determination of audit- elected Dr. Rolf Goessler as its Chairman and Mr. Roland Frobel ing focal points and arrangements relating to fees as well as its Deputy Chairman. Additionally, the Supervisory Board as compliance and acquisitions. The principal duties of the elected the members of the Personnel Committee and Audit Personnel Committee are centred around compensation as Committee at this meeting. well as the conclusion, amendment and termination of Management Board members’ employment contracts. At the Supervisory Board meeting of 2 August 2012, the Super visory Board initially convened without the Management The Audit Committee convened on four occasions during Board being present for the purpose of discussing, among other 2012. The focus of its work was on raising the enterprise things, staff-related issues. Subsequently, the Management value of SIMONA AG. In addition, it dealt with cost structures Board reported on the company’s business performance over and cost comparisons in respect of the foreign production the course of the first six months of 2012 and provided its sites, various acquisition projects as well as the focal points of outlook for the year as a whole. Furthermore, the Supervisory the year-end audit. The Audit Committee reviewed the half- Board informed itself of the business performance and earn- yearly and quarterly results and prepared the proposal by ings of the US subsidiary in the first half of 2012 as well as the the Supervisory Board for the appointment of the inde- situation regarding process stability at the site in the United pendent auditor for the 2012 financial year, to be put for- States. Another item on the agenda related to earnings perform- ward to the Annual General Meeting of Shareholders. ance in the Asia/Pacific region, complemented by an outlook for the annual period as a whole in this region. The Personnel Committee also met on four occasions over the course of 2012. On behalf of the Supervisory Board, At the meeting on 29 November 2012, the Supervisory Board it drew up a proposal for a long-term incentive programme discussed contractual matters relating to the members of the with variable compensation components for the Management COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 9 Report by the Supervisory Board

Board and discussed in particular restructuring measures financial statements at its meeting on 11 April 2013. Further relating to the company’s scheme for occupational pension more, the Supervisory Board concurs with the Management provision. Additionally, the Personnel Committee prepared Board’s proposal for the appropriation of profit, which stipulates candidate proposals for the Supervisory Board election. that the reported unappropriated surplus of € 10,602,233.16 be appropriated as follows: ANNUAL FINANCIAL AND CONSOLIDATED FINANCIAL a) Payment of a dividend of € 7.50 per share, payable on STATEMENTS 10 June 2013: € 4,500,000.00 The accounts of SIMONA GmbH for the 2012 financial year b) Amount to be carried forward to new account: were audited by Ernst & Young AG, Wirtschaftsprüfungsgesell € 6,102,233.16 schaft, Frankfurt, appointed as auditor by the Annual General Meeting of Shareholders on 22 June 2012. Before proposing Dr. Horst Heidsieck resigned from the Supervisory Board Ernst & Young GmbH as auditor to the Annual General Meeting effective from 30 November 2012 due to personal reasons. of Shareholders, the Chairman of the Supervisory Board had The Supervisory Board wishes to thank Dr. Heidsieck for obtained confirmation from Ernst & Young GmbH that there his committed contribution. Under the provisions of Section were no circumstances which might prejudice its independence 13 of the Articles of Association, a new member of the as an auditor. The independent auditor conducted an audit Supervisory Board is to be elected as his successor at the of the annual financial statements as well as the management Annual General Meeting of Shareholders on 7 June 2013. report of SIMONA AG and the consolidated financial state- The election proposal will be announced as part of the invita- ments as well as the Group management report, in conjunction tion to the Annual General Meeting of Shareholders. with the accounting records, and issued an unqualified audit opinion. The financial statements mentioned above, the audit The Supervisory Board would like to thank the Management reports and the Management Board’s proposal for the appro Board as well as all members of staff. They displayed a consid- priation of the unappropriated surplus were submitted to all erable level of commitment over the course of a year that was Audit Committee and Supervisory Board members in good time. challenging and arduous. Finally, the Supervisory Board would At the Supervisory Board meeting on 11 April 2013, the inde- like to express its gratitude to all customers and business pendent auditor furnished detailed information about all ma- partners for the solid working relationship and the immense terial conclusions of the audit and answered all questions put trust placed in SIMONA. forward by the Supervisory Board in a detailed and comprehensive manner. Kirn, 11 April 2013 The Supervisory Board independently examined the financial statements and management report of SIMONA AG as well as the consolidated financial statements and the Group management report, as prepared by the Management Board, in addition to the audit reports issued by the independent auditor and THE SUPERVISORY BOARD the proposal put forward by the Management Board with regard Dr. Rolf Goessler, Chairman to the appropriation of profit. The Supervisory Board raised no objections upon conclusion of this final examination. The Supervisory Board concurs with the findings of the audit conducted by the independent auditor and approved the company’s financial statements, which are thereby adopted pursuant to Section 172 sentence 1 AktG, as well as the consolidated 10

Stock Performance and Capital Markets

SIMONA AG SHARE PERFORMANCE (daily highs in €)

2012 2013 425 400 375 350 325 300 275 250 225 200

01 02 03 04 05 06 07 08 09 10 11 12 01 02 03 04

Germany’s blue chip index DAX performed considerably better sistent performance over the course of the year. In May, the in 2012 than originally anticipated by the majority of experts. stock edged up to an annual high of € 364. It subsequently At the beginning of the year, estimates pointed to a target of dipped to € 307 at the end of the year, which was attributable 6,400 to 6,600 points for the DAX. In actual fact, the index partly to the somewhat unfavourable outlook presented by stood at over 7,670 points at the end of 2012, thus gaining SIMONA for the year as a whole. At the end of March 2013 the more than 26 per cent over the course of the annual period. company’s share price stood at € 320. From its base of 6,075 points at the beginning of the year, the DAX got off to a dynamic start. Supported by favourable job DIVIDEND market data from the US, the index rose to almost 7,200 points The Management Board of SIMONA AG will submit to the by mid-March. In the ensuing period, market sentiment was Annual General Meeting of Shareholders a dividend proposal again dominated by the European debt crisis. Against this back- of € 7.50 per share. SIMONA thus remains committed to drop, the DAX fell to an annual low of around 5,900 points its long-term policy of offering its shareholders an adequate in June. After uneventful trading during the summer months of return on investment and a dividend payout that suitably July and August, the steady flow of capital away from bonds reflects the company’s performance during the financial year. towards stocks was one of the key factors behind turnaround and the more bullish performance of equity markets. Towards the end of the year the DAX reached an annual high of over SIMONA STOCK 7,670 points. At the end of March 2013, Germany’s blue chip WKN 723940 index stood at approx. 7,800 points. ISIN DE0007239402 Type of security Domestic stock PERFORMANCE OF SIMONA SHARES Par value No-par-value shares In 2012, trading was dominated almost entirely by heavy- Share capital € 15.5 million weight stocks, with small- and mid-caps being largely ignored. Stock exchange Frankfurt am Main, General Standard Berlin Against this background, SIMONA shares delivered an incon- COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 11 Stock Performance and Capital Markets Governing Bodies

Governing Bodies at SIMONA AG

MEMBERS OF THE MANAGEMENT BOARD

Wolfgang Moyses Dirk Möller Fredy Hiltmann Chairman Deputy Chairman Chief Financial Officer Chief Executive Officer Chief Operating Officer Member of the Management Board Member of the Management Board since 1999 Member of the Management Board since 1993 since 1 January 2012

Areas of responsibility Areas of responsibility Areas of responsibility Strategic Business Development Production Accounting Global HR & Legal Real Estate/Construction & Occupational Safety Controlling Investor Relations Technical Service Centre Purchasing Sales Logistics IT & Organisation Marketing & Communications Quality Management

MEMBERS OF THE SUPERVISORY BOARD SUPERVISORY BOARD COMMITTEES

Hans-Werner Marx Chairman Audit Committee Kirn, Kaufmann (until 22 June 2012) Hans-Werner Marx, Chairman Dr. Rolf Goessler Deputy Chairman (until 22 June 2012) Bad Dürkheim, Diplom-Kaufmann (until 22 June 2012) Roland Frobel, Chairman Chairman (Chairman since 22 June 2012) (since 22 June 2012) Dr. Rolf Goessler Roland Frobel Deputy Chairman Dr. sc. techn. Roland Reber Isernhagen, Managing Director of (since 22 June 2012) (member since 22 June 2012) Dirk Rossmann GmbH, Burgwedel Dr. sc. techn. Roland Reber Stuttgart, Managing Director of Personnel Committee Ensinger GmbH, Nufringen Dr. rer. nat. Horst Heidsieck (member from Hans-Werner Marx, Chairman Managing Partner of Value Consult Manage- 22 June 2012 to 30 (until 22 June 2012) ment- und Unternehmensberatungsgesells- November 2012) Dr. Rolf Goessler, Chairman chaft mbH and DOMINO GmbH, Büdingen (Chairman since 22 June 2012) Bernd Meurer Employee Roland Frobel Hennweiler, Maintenance Fitter Representative Dr. rer. nat. Horst Heidsieck (until 28 February 2012) (member 22 June 2012 to 30 November 2012) Andreas Bomm Employee Dr. sc. techn. Roland Reber Schmidthachenbach, Maintenance Fitter Representative (member since 1 December 2012) (since 28 February 2012) Gerhard Flohr Employee Bergen, Maintenance Fitter Representative (since 28 February 2012)

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Foto: Gettyimages 14

Milestones

03 – IFAT ENTSORGA 2012 – SIMONA UNVEILS NEW PRODUCTS SIMONA showcased its range of pipes and fittings at the world’s leading trade fair for Water, Sewage, Waste and Raw Materials management in Munich. Introducing a new exhibition stand concept with a prominent three-dimension “S”, the company focused on several new products, among them a multilayer pipe with an abrasion-resistant interior skin as well as the next generation of its SIMOFUSE joining technology.

SIMCHEM ONLINE PRESENTED AT ACHEMA At the world’s largest Exhibition-Congress on Chemical Engineering, Environmental Protection and Biotechnology, SIMONA unveiled the online 01 version of its chemical database SIMCHEM for the first time – comprising more than 4,000 substances and proprietary products. Acknowledged as a standard source of reference, SIMCHEM is a reliable and compre hensive guide when it comes to determining the chemical resistance of 01 – SIMONA RUS – KEEPING CLOSE TO CUSTOMERS IN EASTERN EUROPE materials used in SIMONA products. SIMONA is fully committed to its policy of becoming increasingly international in its outlook. The new Russian subsidiary in Moscow has now commenced NEW WEBSITE AND PRODUCT CATALOGUE FOR SIMONA AMERICA operations. It‘s key objectives include promoting the SIMONA product range The IAPD Conference in Chicago, an annual event that brings together rep- in a highly focused manner and establishing a network of sales partners resentatives of the US plastics industry, was the perfect platform for in Russia. In January 2013, the SIMONA exhibition stand at Interplastica, SIMONA AMERICA to premiere its new product catalogue and completely Russia‘s largest trade fair for plastics, provided the perfect platform to redesigned website. pursue these goals. 04 – THE SIMONA SALES ACADEMY GREEN SOLUTIONS – NEW BIOGAS FILTER FOR LANDFILL ENGINEERING SIMONA spearheaded its new training campaign with a seminar held in SIMONA has developed a biofilter for the passive degassing of landfill sites. Kirn for twenty of it’s customers from the Czech Republic. The SIMONA This new method is aimed at the eco-friendly treatment of gases produced in Sales Academy brings together the company’s global training activities for landfills. SIMONA’s biogas filter is the perfect solution for this field of appli- customers and business partners. Additionally, the concept introduced cation. The filter system is installed within the landfill body, and the lean gas by SIMONA includes advanced training and education programmes for produced by the site is subsequently discharged through this filter. The inte- company employees working in the areas of marketing and sales. rior of the gas filter is filled with bark mulch, which is biologically active. > www.simona-salesacademy.com

02 – NEW SILOS FOR SIMONA PLANT IN KIRN SIMONA IBERICA SHOWCASES RANGE OF PIPES AND FITTINGS AT SMAGUA SIMONA will increase its storage capacity at Plant II in Kirn by installing As an exhibitor at SMAGUA, the focus for SIMONA IBERICA was on estab- eight new silos. This investment was essential in view of the more demand- lishing new contacts and intensifying customer relations. Held in Zaragoza ing requirements with regard to supply chain planning and the more inter once every two years, SMAGUA is a trade fair dedicated to the water and national nature of commodities procurement. The eight silos, each with a environmental industry. capacity of 100 tonnes, are to be integrated into the existing mix/weighing system over the course of two construction stages. PLASTINDIA – PRODUCT RANGE FOR SAFETY AND THE ENVIRONMENT SIMONA presented solutions for industrial applications at the largest trade fair for India’s rapidly growing plastics market.The emphasis was on backed sheets and pipes used primarily in the area of chemical tank and equipment construction.

SIMONA FRANCE AT POLLUTEC HORIZONS Staged in Lyon, Pollutec Horizons is France’s premier trade fair for environmental technology, energy and sustainable development. Serving this key foreign market, SIMONA FRANCE presented in particular piping systems used in industrial applications as well as in the field of sewage treatment and water supply. 02 COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 15 Milestones

04 16

Commitment

NEW INTEGRATED DEGREE PROGRAMME FOR PLASTICS ENGINEERING SIMO FIT! HEALTH DAYS AT SIMONA Alongside its integrated degree course in Business Administration, SIMONA SIMONA’s company health management programme “SIMOFIT. Mach mit!” launched a new integrated degree programme for Plastics Engineering in the kicked off with two Health Days. In cooperation with the health insurer AOK summer semester of 2012, working in cooperation with the University of and various local service providers, the company organised workshops on Applied Sciences Darmstadt. This is yet another component of the SIMONA health-conscious behaviour as well as vein screenings, lung function tests Corporate Academy, which stands for excellence in training and education. and much more besides.

TALENT PROMOTION CIRCLE TYPING CAMPAIGN BY THE GERMAN BONE MARROW DONOR CENTER The first-year members of the Talent Promotion Circle established in 2011 In many cases, a stem cell donation is the only glimmer of hope for are being trained in various subjects, one of them being “results-oriented people suffering from leukaemia. Together with the German Bone Marrow and authentic leadership”. The SIMONA Talent Promotion Circle is aimed at Donor Center (DKMS), SIMONA launched a bone marrow typing campaign preparing young staff members with high potential for specialist and mana for employees at the Kirn site, with all expenses being covered by the gerial duties. company. As a result, many new stem cell donors are now registered with the DKMS. The stem cells of two members of the SIMONA staff have 01 – SIMONA® ECO-ICE®-CUP been confirmed as a match for leukaemia patients, thus highlighting the The SIMONA® Eco-Ice® Cup is super cool. Staged for the second time in importance of bone marrow typing. Kirn, the ice hockey tournament played entirely on plastic sheets supplied by SIMONA was another resounding success. For the first time, cup 04 – INTERNATIONAL TRAINING matches were also played in Lahr-Mietersheim. In Litvinov (Czech Repub- Customers served by SIMONA ITALIA attended the newly established lic), meanwhile, the professional ice hockey team HC Verva Litvinov also Sales Academy for training centred around the SIMONA product range as tried out the Eco-Ice® sheets. well as various processing methods. At the annual Sales Meeting in Kirn, meanwhile, our sales team from Latin America presented its goals for 02 – SIMONA EURO 2012 TIPPING COMPETITION the coming year. Customers from Latin America took part in product and The tipping competition organised for the UEFA Euro 2012 Football Champion applications seminars staged in Kirn. ship proved immensely popular. Almost 400 members of staff put their foot- balling knowledge to the test in a hard-fought contest for attractive prizes. SIMONA PLAST-TECHNIK S.R.O. SUPPORTS CULTURAL AND ENVIRONMENTAL PROJECTS ELISABETH-STIFTUNG CORPORATE RUN The Environment Team at SIMONA Plast-Technik, Litvinov, was deter- Together with 600 other runners, 15 members of the SIMONA workforce took mined to make an active contribution to nature and the environment. part in the corporate run in Birkenfeld organised by the Elisabeth-Stiftung From the various suggestions put forward the team chose a project to charitable trust. tidy up the site of an old Baroque chapel in Sinutec by removing over- grown plants and rubbish. This is just one example of the many commu- 03 – NEW-LOOK KIT AND VICTORY FOR COMPANY TEAM nity projects undertaken by SIMONA staff around the globe on a volun- The company football team of SIMONA AG achieved an emphatic 5:3 victory tary basis. over the team representing Johann Hay GmbH und Co. KG Automobiltechnik at a sports event held in Merxheim.

01 02 COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 17 Commitment

04 18

Projects

02 03 COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 19 Projects

01 – SPC RC- AND RC-LINE PRESSURE PIPES USED IN NATURAL GAS 04 – TWIN-WALL SHEETS FOR THE CONSTRUCTION OF DOUBLE- PIPELINES FOR STÄDTISCHE WERKE GRENCHEN (SWG) CONTAINMENT TANKS FOR ROOS & CO KUNSTSTOFF - UND METALL As part of a construction project for a new natural gas pipeline in the VERARBEITUNGS GMBH Swiss cantons of Solothurn and Bern, utility company SWG Grenchen Roos & Co Kunststoff- und Metallverarbeitungs GmbH secured a contract required robust, pressure-resistant plastic pipes. They had to be suitable from BakerCorp GmbH & Co. KG for the construction of double-contain- both for trenchless and for sandbedless pipelaying. The choices made ment tanks for liquids hazardous to water. BakerCorp is the market leader were SIMONA® SPC RC-Line Protective-Jacket Pipes and SIMONA® RC-Line for high-end applications in the area of storage, filtration and pumps. Pressure Pipes. They display excellent bond and shear strength proper- The tanks are used wherever liquids that are hazardous to water have to ties between the inner pipe and protective jacket, in addition to offering be stored on a temporary basis, e.g. in the case of accidents or as part a high level of protection against physical damage. of installation and servicing projects. Mobile deployment and superior leak age monitoring were among the key determinants in choosing SIMONA® 02 – PE SHEETS FOR WAKEBOARD OBSTACLES FOR UNIT PARKTECH AG twin-wall sheets for the construction of tanks with a capacity of 28,000 UNIT Parktech AG is the global market leader in the development, produc- litres. SIMONA‘s Technical Service Centre provided assistance during tion and marketing of wakeboard obstacles. The company has put its trust the design and construction stages. The roof of the tank, with entry points in SIMONA® PE sheets for components used in the production of these for cleaning, was engineered from slip-resistant, walk-on SIMONA® PE 100 obstacles. Superior processability and high UV resistance proved to be key AR sheets. factors when it came to selecting the SIMONA material. The latter will also feature in the “O‘Neill Wake The Line” event, a major wakeboard and 05 – WHITE PP SHEETS FOR THE DESIGN OF A WET PROCESS LINE wakeskate competition organised by UNIT Parktech. FOR ATP GMBH atp GmbH develops and implements supply and disposal systems for 03 – SIMOLIFE – NEW PRODUCT LINE FOR ORTHOPAEDIC DEVICES substances used in the semiconductor and photovoltaics industry as well The newly developed SIMONA® SIMOLIFE line is an extensive product range as in the field of polymer plant and equipment engineering. The com- specially tailored to the requirements of the orthopaedics technology pany uses SIMONA®products made of PVC, PP and PVDF. The materials sector. The range of semi-finished parts featuring the materials PE, PP and deployed in media-carrying pipes are selected according the specific PETG has been extended to include sheets engineered from ethylene- area of application. SIMONA supplied white PP sheets for the construc- vinyl acetate (EVA). SIMONA® SIMOLIFE EVA has been specially designed tion of a wet process line by atp. This material combines high chemical for the manufacture of inner sheaths used in arm and leg prosthetics. resistance with excellent corrosion resistance. White PP sheets are pre- The two product types EVA flex and EVA superflex are designed to meet destined for interior applications in which a high-quality visual appea- a wide range of requirements with regard to flexibility of the specific rance is of particular importance. material. SIMONA® SIMOLIFE EVA Sheets have excellent hot-forming properties. Displaying minimal material shrinkage during cool-down, they also offer the advantage of high dimensional stability with uniform wall thickness distribution. The material is biocompatible in accordance with DIN EN ISO 10993-5/-10, thus guaranteeing excellent safety and extreme durability.

04 05

More Efficiency

R&D within the field of new designs and appli cations has seen the emergence of a trend towards more efficient, resource-friendly materials and process engineering.

SIMONA products will form an integral part of lightweight construction solutions of the future.

Thanks to the low weight and high stability of SIMONA® twin-wall sheets, for example, swimming pools can be manufactured as complete ready-to-install units. 22

Group Management Report of SIMONA AG for the 2012 Financial Year

1. BUSINESS ACTIVITIES AND GENERAL CONDITIONS Semi-finished products (sheets, rods, welding rods) are manufactured at two plants in Kirn (Rhineland-Palatinate), while 1.1 Organisation and legal structure of the SIMONA Group pipes, fittings and finished parts are produced at a facility in The SIMONA Group develops, manufactures and markets a Ringsheim (Baden-Wuerttemberg). The facility based in range of semi-finished thermoplastics, pipes and fittings as Hazleton (Pennsylvania, USA) primarily manufactures extruded well as finished parts and profiles. The materials used include semifinished parts for the American market. The plant in polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), Litvinov (Czech Republic) produces sheets and pipes, mainly polyethylene terephthalate (PETG), polyvinylidene fluoride for the Eastern European market, while the site in Jiangmen (PVDF) and ethylene-chlorotrifluoroethylene (E-CTFE) as well as (China) manufactures extruded sheets. various specialist materials. The production methods applied within this area range from extrusion, pressing and injection In the financial year under review the Management Board con- moulding to CNC manufacturing. SIMONA also maintains its own sisted of Wolfgang Moyses (Chairman/CEO), Dirk Möller plastics workshop for the production of customised fittings. (Deputy Chairman/COO) and Fredy Hiltmann (Board member Semi-finished products are deployed mainly within the area of Finance and Administration/CFO). At the Annual General chemical tank and equipment construction, mechanical en Meeting on 22 June 2012 scheduled elections were held for gineering, the transport industry, the construction sector, the the Supervisory Board members to be newly appointed by the exhibition and display sector as well as the automotive industry. company‘s shareholders. The Supervisory Board members to Pipes and fittings are used primarily for drinking-water supply, be newly appointed by staff representatives were elected in sewage disposal and industrial piping systems, including the February 2012. As a result, the Supervisory Board comprised chemical process industry. Finished parts are destined in par the following members in the financial year under review: ticular for the mechanical engineering and transport technology J Hans-Werner Marx (Chairman until 22 June 2012) sectors. J Dr. Rolf Goessler (Deputy Chairman until 22 June 2012, Chairman since 22 June 2012) The SIMONA Group markets its products worldwide. The sales J Roland Frobel (Deputy Chairman since 22 June 2012) structure is primarily based on the following three sales regions: J Dr. Roland Reber J Germany J Dr. Horst Heidsieck (from 22 June 2012 to J Rest of Europe and Africa 30 November 2012) J Asia, Americas and Australia J Bernd Meurer, Staff Representative The secondary classification is based on product areas: (until 28 February 2012) J Semi-finished and finished parts J Andreas Bomm, Staff Representative J Pipes and fittings (since 28 February 2012) Sales activities at Group level are conducted by SIMONA AG J Gerhard Flohr, Staff Representative and subsidiaries in the United Kingdom, Italy, France, Spain, (since 28 February 2012) Poland, the Czech Republic, Russia, Hong Kong, China and the United States, both directly and via trading partners. Beyond this, the AG (i.e. the parent company) operates a sales office in 1.2 Business Review Moehlin, Switzerland. The parent company, SIMONA AG, has its registered office in 55606 Kirn (Germany). In the period under Revenue growth dampened by sluggish investment spending – review, the SIMONA Group operated three facilities in Germany Expansion in emerging markets and three plants located abroad. The overall performance of the global economy in 2012 was adversely affected by the euro crisis. According to data published by the International Monetary Fund (IMF), growth stood COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 23 Business Activities and General Conditions

at 3.2 per cent, down from the figure of 3.9 per cent recorded REVENUE SIMONA GROUP (in €m) in 2011. Bucking this trend, the only regions to achieve above-average growth rates were the emerging markets of Asia 308.5 293.2 – albeit with much less momentum than in 2011 – as well as the Middle East and North Africa. In Europe, meanwhile, the 267.4 situation was dominated by budget deficits in the public sector, lack of demand and rampant unemployment. The United States saw its economy expand at a slightly more pronounced rate in the second half of the year, although it continues to be held back by high levels of unemployment. In its latest outlook issued in January, the IMF anticipates that the global econ omy will grow by 3.5 per cent in 2013. 2012 2011

The economic conditions outlined above had a detrimental 2010 effect on the SIMONA Group’s revenue performance. Although business remained stable over the course of the period under review, it failed to reach the level recorded in the previous year. The Group fell just short of achieving its revenue target of Review of the principal sales segments and plastics € 300 million. Sales revenue for the financial year 2012 as a processing industry whole contracted by 5.0 per cent to € 293.2 million (prev. Buoyed by solid exports to non-European countries, the German year: € 308.5 million). Sales revenue generated by the parent chemical industry succeeded in matching last year’s revenue company, SIMONA AG, fell by 8.2 per cent, down from levels in 2012. In this context, pricing was a contributory factor. € 265.1 million to € 243.4 million. Owing to the overall decline in demand, production fell by around 3 per cent. Germany The German economy remained robust despite having to oper- Between January and November 2012 Germany’s production ate against the backdrop of challenging economic conditions output of machinery and equipment increased by 1.8 per cent. in Europe. Adjusted for working days, the domestic economy The industry association VDMA has forecast growth of 2 per grew by 0.9 per cent (prev. year: 3.0 per cent). Having said that, cent for the mechanical and plant engineering sector in the the German market as a whole showed visible signs of slow- year as a whole. In specific areas, however, the situation in down from as early as the second quarter of 2012 onwards. terms on incoming orders proved difficult. For the period from The fourth quarter actually produced a decline of 0.6 per cent January to November, order intake was down 4 per cent on compared to the preceding three months. Foreign trade proved the previous year’s figure. This was attributable in particular to be a more dynamic growth driver than consumer spending. to the situation faced by manufacturers of components, Capital expenditure on machinery and equipment, which is of machines and systems in the solar power industry, with order particular importance to SIMONA’s business, was significantly intake having already plunged by more than half towards lower than in 2011. Investments within this area fell by the end of 2011. Capacity utilisation levels declined again. At 4.8 per cent compared to the previous year. In 2011, by con- 84.6 per cent, the figure recorded in October 2012 was down trast, capital expenditure on machinery and equipment had on the long-term average of 86.2 per cent. increased by 8.3 per cent year on year. The exhibition and trade fair industry again managed to produce slight growth in 2012. In total, the number of exhibitors at 24

REVENUE BY REGION SIMONA GROUP (in per cent)

2011 2012

Asia, Americas and Australia: Asia, Americas and Australia: 16.8 % 18.4 %

Germany: Germany: 33.9 % 31.8 %

Rest of Europe and Africa: Rest of Europe and Africa: 49.3 % 49.8 %

the 161 national trade fairs throughout Germany rose by The significant fall in investment spending had a dispropor 1.5 per cent. At 2.5 per cent, attendance by foreign exhibitors tionately large impact on revenue performance in Germany. increased at an above-average rate, whereas total visitor Furthermore, business relating to sheets destined for the pho- numbers fell by 1 per cent. tovoltaics and solar energy industry, which had produced a boom in 2011, contracted to almost zero. Sales revenue fell by The overall performance of the principal construction industry 11.0 per cent to € 93.1 million (prev. year: € 104.6 million). in Germany fell short of expectations. Revenue generated As a sales region, Germany accounted for 31.8 per cent of total in this industry rose by 0.5 per cent compared to the previous revenue, down from 33.9 per cent a year ago. year; the forecast had stood at 1.5 per cent. The construction industry as a whole was supported by the housing sector, which Rest of Europe and Africa saw growth of 4.7 per cent. The commercial building sector The eurozone economy dipped into recession in 2012, with expanded by 1.4 per cent, whereas the public-sector construc- the overall situation being dominated by the unresolved sover- tion industry recorded a decline in revenue by 5.5 per cent. eign debt crisis and high levels of unemployment. In total, the gross domestic product of the euro member states fell by After a record year in 2011, Germany’s plastics processing 0.6 per cent. Conditions deteriorated over the course of the industry was much more restrained in the period under review. year. After a decline of 0.4 per cent in the first quarter, eco- At € 56.2 billion, sales revenue edged up by just 0.5 per cent. nomic output contracted by 0.9 per cent in the fourth quarter Almost all of the plastics processing companies had to contend of 2012. Italy, Spain and Portugal bore the brunt of the with a significant downturn in business from the spring of downturn in economic output. Meanwhile, among the large 2012 onwards, as a result of which earnings came under economies within the eurozone only Germany managed to increasing pressure. At plus 0.5 per cent, exports were slightly increase its GDP. In 2012, gross capital investments fell by weaker than imports (plus 0.6 per cent). The industry as a 1.1 per cent in the eurozone as a whole. whole was faced with more intense competitive pressure from imports, with companies located in the crisis regions of Europe At 5.2 per cent, the Middle East and North Africa recorded increasingly trying to sell their products in Germany. stronger economic growth than in 2011 (3.5 per cent). However, COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 25 Business Activities and General Conditions

the proportion of revenue generated by the SIMONA Group in REVENUE BY PRODUCT GROUP SIMONA GROUP (in €m) this region is insignificant. With economic conditions remaining 215.0 difficult, SIMONA recorded sales revenue of € 146.1 million 229.4 (–6.3 %) (prev. year € 152.0 million) in the region covering Rest of Europe and Africa. This was 3.9 per cent less than in 2011. 78.2 (– 1.1 %) Asia, Americas and Australia 79.1 After an above-average performance in the final quarter the Semi-finished and finished parts US economy grew at a more pronounced rate than originally Proportion of revenue: 73.3 % anticipated. The International Monetary Fund has projected 2012 GDP growth of 2.3 per cent, on the back of 1.8 per cent in the Pipes and fittings 2011 previous year. Having said that, the domestic economy as a Proportion of revenue: 26.7 % 2012 whole continues to be dominated by low capacity utilisation 2011 and high unemployment together with the unresolved questions about the US budget. The major economies in Asia, meanwhile, were faced with a significant slowdown in growth. Indeed, at 7.8 per cent, China recorded its lowest growth rate since the crisis in 2009. Being heavily dependent on exports, the slight increase in sales revenue from PVC foam sheets used Chinese industry was adversely affected in particular by the in the field of advertising technology, exhibition design and global downturn in demand. India’s economy grew at a rate of structural engineering. In total, finished and semi-finished parts just 4.5 per cent, having previously expanded by 7.9 per cent accounted for sales revenue of € 215.0 million (prev. year: in 2011. Latin America also had to contend with much more € 229.4 million). This corresponds to a year-on-year decline of subdued economic activity. In Brazil, the region’s largest econ- 6.3 per cent. omy, GDP rose by a mere 1.0 per cent, compared to 2.7 per cent in the previous year. Within the product area of pipes and fittings, the Group managed to generate further growth in the market segment of PE The SIMONA Group managed to maintain its forward momen- pipes and fittings for civil engineering applications. SIMONA tum in Asia over the course of 2012. In North America, by con- was chosen for several interesting projects in this market, par- trast, sales revenue was down slightly following a realignment ticularly in Central and Eastern Europe as well as in the area of the company’s business model. In total, the region com of power generation in the eastern region of Germany. Business prising Asia, Americas and Australia saw revenue increase relating to industrial piping systems (PP, PVDF) proved more by 4.1 per cent to € 54.0 million (prev. year: € 51.9 million). challenging in Central and Western Europe, primarily due to the This region accounted for 18.4 per cent (prev. year: 16.8 per lack of investment within the photovoltaics segment. In Asia, cent) of total sales revenue, a further increase compared to by contrast, the Group succeeded in expanding the proportion the previous year. of revenue generated within this market segment by stepping up its sales activities, as a result of which PP piping business Reduction in revenue from finished and semi-finished parts – almost matched the level achieved in the previous year. In total, Stable business performance in the area of pipes and fittings sales revenue in the pipes and fittings product area stood at The product category comprising finished and semi-finished € 78.2 million, a year-on-year decline of 1.1 per cent. parts saw a significant decline in revenue relating to extruded sheets made of PP and fluoroplastics. Revenue from the sale of extruded PE sheets remained stable. The Group recorded a 26

Restructuring of product development 2. FINANCIAL PERFORMANCE Product development underwent restructuring in 2012, including two new appointments in key areas – the Head of Earnings Applications Development and the Head of Global Process Against the backdrop of a downturn in business, Group earn- Development. At SIMONA, product development encompasses ings before interest and taxes (EBIT) declined from € 19.8 mil- the improvement of properties relating to existing plastic lion to € 13.8 million. At 4.7 per cent, the EBIT margin was products, usually in response to new customer requirements lower than in the previous year (6.4 per cent). Group earnings (customising), as well as the testing of new materials and the before taxes (EBT) fell from € 20.7 million to € 14.8 million. development of new applications for plastics. The EBT margin stood at 5.1 per cent (prev. year: 6.7 per cent).

In 2012, one of the focal points for product development was Following the contraction in revenue, the Group’s gross profit the expansion of the overall range of materials. For instance, declined by € 10.0 million to € 130.0 million in 2012, which the material ethylene-vinyl acetate (EVA) was used to develop represents 44.3 per cent of revenue (prev. year: 45.4 per cent). sheets specially designed for applications in the area of orthopaedics technology. The newly developed sheets were launched Owing to a slight reduction in stock levels, the change in onto the market at the beginning of 2013. SIMONA® SIMOLIFE inventories, as presented in the income statement, amounted EVA is deployed specifically in the manufacture of inner sheaths to minus € 0.5 million. used in arm and leg prosthetics. In the area of environmental technology, meanwhile, SIMONA developed a variant of its PVC- Other operating income totalled € 6.6 million (prev. year: Glass product. It meets more demanding requirements in € 6.5 million). various fields of application, e.g. for the use in bioreactors. The Group’s product range in the area of fluoroplastics was extend- On the whole, raw materials became slightly more expensive ed to include the partially fluorinated material ETFE, whose over the course of 2012. However, to a large extent the rise in chemical resistance is superior to that of E-CTFE. Additionally, a raw material costs was offset by adjustments to the sales new type of backing was developed for liner material and prices. The cost of raw materials and consumables used fell by added to the product range. Committed to eco-driven product 7.3 per cent, i. e. at a slightly more pronounced rate relative to development aimed at reducing greenhouse emissions in the decline in revenue. In total, the cost of materials decreased landfills, the piping systems unit came up with a standardised to € 169.3 million year on year (prev. year: € 177.5 million). landfill gas filter. A newly developed push-in socket connection, At € 10.0 million, energy costs attributable to SIMONA AG were with the socket integrated within the pipe wall, is now being slightly down on last year’s figure of € 10.2 million. used in pipes for the drainage of railway structures operated by Deutsche Bahn AG (approval by German Federal Railway As a result of the lower headcount, staff costs fell by € 1.0 mil- Authority and DB AG). lion to € 57.6 million.

Research and development expenses are mainly comprised of Amortisation of intangible assets and depreciation of property, staff costs, material costs and amortisation/depreciation of plant and equipment amounted to € 11.4 million (prev. year: non-current assets. Owing to the interrelationship between cus- € 11.9 million). tomer-specific manufacturing procedures, optimisation measures within the area of process engineering and formulae as Other operating expenses fell by € 2.5 million to € 47.2 million. well as product development itself, the above-mentioned Owing to the downturn in business, the Group saw a reduction, expenses cannot be clearly segregated from production costs. in particular, in the costs attributable to outward freight, pack- COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 27 Business Activities and General Conditions Financial Performance Financial Assets and Liabilities

aging and distribution as well as temporary staff. By contrast, EBIT PERFORMANCE SIMONA GROUP (in €m) expenses relating to exchange rate fluctuations increased in the period under review. 19.8

On the whole, the performances of the individual sales compa- 13.8 nies were favourable. The subsidiaries in Poland, the United Kingdom and France, in particular, made larger earnings contri- 6.4 % 4.7 % butions when compared to the previous year. Established in 10.1 2011, the sales company based in the Russian Federation was not yet in a position to post a profit in the 2012 financial year. 3.8 %

The production company in the Czech Republic raised its profit- 2012 ability levels slightly in 2012. EBIT margin 2011 (per cent) 2010 The US subsidiary saw its earnings move into positive territory in 2012.

The sales companies in Asia managed to improve their earn- 3. FINANCIAL ASSETS AND LIABILITIES ings performance compared to the previous year. The plant in China is still in the start-up phase and has yet to advance Cash and cash equivalents mainly comprise short-term bank beyond the break-even threshold. deposits of € 36.9 million (prev. year: € 26.1 million).

EBIT margin Other financial assets amounting to € 21.0 million (prev. year: The analysis and assessment of earnings performance by € 30.2 million) encompass an investment made in 2010 in SIMONA is based primarily on EBIT (earnings before interest bonded loans issued by Deutsche Pfandbriefbank as well as and taxes) and EBITDA (earnings before interest, taxes, depreci- fixed-term deposits created in 2012. ation and amortisation). EBIT represents the operating result before interest and taxes as well as the effects of equity invest- Non-current financial liabilities were scaled back by € 4.6 mil- ments. EBITDA represents an approximation for cash flow from lion to € 0.1 million in the financial year under review. The operating activities, as non-cash depreciation of property, plant current financial liabilities amounting to € 3.8 million (prev. year: and equipment as well as amortisation of intangible assets are € 0.3 million) now include a US dollar loan due at the end of added to the EBIT figure. 2013, which in the previous year was presented in non-current financial liabilities. The Group’s derivative financial instru- With EBIT standing at € 13.8 million, the Group achieved an ments include an interest rate swap of € 0.1 million (prev. year: EBIT margin of 4.7 per cent (prev. year: € 19.8 million, 6.4 per € 0.1 million) for the purpose of hedging the risk associated with cent). EBITDA at Group level fell to € 25.3 million (prev. year: a US dollar loan. € 31.7 million), with amortisation of intangible assets and depre ciation of property, plant and equipment slightly lower than in the preceding year. At 8.6 per cent, the EBITDA margin was down on the figure of 10.3 per cent recorded in the previous financial year. 28

Other financial obligations totalling € 2.2 million (prev. year: Cash and cash equivalents rose by € 10.8 million. The year-on- € 3.7 million) were attributable to operating rental and lease year change is attributable mainly to the availability of funds agreements. Of this total, an amount of € 1.0 million is due under short-term financial arrangements. These changes are within one year. Contracts already awarded in connection with presented in the statement of cash flows in the notes to the investment projects gave rise to current obligations of consolidated financial statements. € 10.5 million (prev. year: € 5.7 million). Total equity and liabilities were dominated by an increase in Based on finance income of € 1.2 million and finance cost of equity by € 6.0 million, with a slight year-on-year reduction € 0.3 million, net finance income amounted to € 0.9 million in liabilities. in 2012 (prev. year € 0.9 million). At the end of the financial year, Group equity amounted to € 180.7 million (prev. year: € 174.6 million). This figure 4. FINANCIAL POSITION includes annual profit of € 11.5 million and a dividend payment of € 5.7 million in 2012. The equity ratio for the As at 31 December 2012, total assets were up € 3.0 million to Group was 69 per cent at the end of the reporting period € 260.1 million. (prev. year: 68 per cent).

Property, plant and equipment rose to € 90.9 million (prev. year: At € 11.3 million, trade payables remained unchanged year € 89.2 million), in particular due to the purchase of a ware- on year. house as well as investments made at the site in Kirn. Invest ments in property, plant and equipment at Group level Other current and non-current provisions declined slightly, amounted to € 13.5 million, outpacing depreciation and write- mainly due to the utilisation of provisions in connection with downs by € 2.3 million. staff-related obligations.

Inventories of raw materials and consumables rose by € 0.1 million year on year, while finished goods and merchandise were 5. EVENTS AFTER THE REPORTING PERIOD down by € 0.5 million at the end of the reporting period. There were no events of material significance to the state of Trade receivables increased by € 0.7 million to € 43.3 million affairs of the SIMONA Group in the period between the end of due to factors relating to the reporting date. the 2012 financial year and the preparation of this management report. Beyond this and in accordance with statutory pro- Other assets decreased from € 6.1 million a year ago to visions, interim announcements will be issued, outlining the € 5.7 million. This item includes the entitlement of SIMONA AG, development of the entity and any events that are subject to capitalised at its present value, relating to corporation tax disclosure requirements. credits of € 3.3 million (prev. year: € 3.9 million), the economic benefits of which will flow to the company after 31 December 2012. 6. RISK REPORT

The risk management system of SIMONA AG controls the following material risks associated with the Group: risks relating to the general business environment and sector, financial risks and information technology risks. COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 29 Financial Assets and Liabilities Financial Position Events After the Reporting Period Risk Report Report on Expected Developments

Business environment and sector-specific risks Information technology risks The risks associated with the general business environment Information technology risks relate mainly to the disruption of and the sector in which the company operates relate mainly to IT systems, loss of data and attacks on IT systems together the economic performance of customer segments served by with industrial espionage. Risks attributable to information tech- SIMONA. They also include exchange rate and commodity price nology are controlled Group-wide by the company’s own IT volatility as well as the availability of raw materials. Among department, whose task is to manage, maintain, refine and the primary sector-specific risks are the substitution of plastics protect the IT systems on a continual basis. with other materials, new developments within the competitive environment, the loss of key customers and changes to cus- The risk management system was further refined in 2012 and tomer requirements. These risks are mitigated by a diversified adapted to current requirements. In particular, the risk manage- product portfolio, thorough monitoring of markets and struc- ment guideline was reviewed and a risk map was introduced tured procurement management. The production facilities in the with the help of which areas of risk can be assessed in respect United States, China and the Czech Republic provide greater of their financial implications and the probability of their occur- flexibility when it comes to meeting new customer requirements rence. At the same time, appropriate measures can be initiated in close proximity to their sites of operation. where required.

Financial risks At the end of the 2012 financial year, we are of the opinion that They encompass, above all, currency risks, default risks, prod- the overall risk situation for the company remains unchanged uct liability risks and risks associated with the company pen- from that of the previous year. At the time of preparing this sion scheme. Price risks associated with exchange rates tend report, there were no identifiable risks that might jeopardise the to increase in proportion to revenue generated outside the company’s existence as a going concern. eurozone. The expansion of production in foreign sales markets has helped to scale back risks within this area. The most sig Corporate Governance Statement nificant risk with regard to business development in 2012 was The declaration on corporate governance pursuant to Section again attributable to the unresolved sovereign debt crisis 289a (1) sentences 2 and 3 of the German Commercial Code within the eurozone. High and extremely volatile commodity (Handelsgesetzbuch – HGB) has been published by SIMONA AG prices constitute another key risk to the Group’s earnings per- on its corporate website at www.simona.de. formance. We expect to see a further structural upturn in commodity prices over the medium to long term. Additionally, the risk of default has increased as a result of the difficult 7. REPORT ON EXPECTED DEVELOPMENTS economic climate. Within this context, thorough assessments of credit ratings and continuous monitoring within this area help Global economy set for slight recovery to mitigate risk as a whole as well as risk associated with indi- According to forecasts issued by the International Monetary vidually identifiable items. Default-related risk associated with Fund (IMF), the global economy looks set to grow at a faster specific customers is limited by credit insurance and the cut-off rate in 2013 compared to 2012. In its economic outlook of deliveries in the case of outstanding payments. The carry- published in January, the IMF pointed to growth of 3.5 per cent. ing amounts of inventories are assessed on a regular basis, and The so-called advanced economies are likely to expand by adjustments in the form of allowances are made for specific just 1.4 per cent in total. Within this group, the United States is unsaleable products. In our opinion, the company’s overall risk expected to see its economy expand by 2.0 per cent, while situation in 2012 has not changed materially in relation to the IMF predicts a contraction of 0.2 per cent in the eurozone. the previous financial year. Growth will be driven in particular by the emerging markets of Asia, led by China with 8.2 per cent. However, the global 30

economy continues to be overshadowed by a number of uncer- beginning of 2013. Given the intense competitive forces, pass- tainties. The crisis engulfing the euro area has now also ing any price increases on to the market will prove difficult. adversely affected growth within the emerging economies. In In view of the Group’s weaker business performance in the first the US, meanwhile, the national budget remains a source of quarter of 2013, compared to both the previous year and cor- uncertainty. porate forecasting, we currently believe that achieving our targets for 2013 will be immensely challenging. At present, we The plastics processing industry is expected to trend sideways anticipate that revenue of between € 280 and 290 million will in the first half of 2013, followed by an upturn in business in be achievable in the financial year as a whole, with an EBIT the second six months of the year. margin on 3 to 4 per cent. Should the economic climate improve significantly in the second half of the year, the original Against the backdrop of persistent uncertainties in the global targets forecast will be achievable. economy, there appears to be little chance of a fundamental improvement in business confidence in 2013. In view of this, In view of the as yet unresolved sovereign debt crisis in Europe SIMONA anticipates that the economic situation will remain and the uncertainties surrounding the global economy, busi- challenging, with a subdued propensity to invest within the cor- ness performance in 2014 is difficult to predict. The medium- porate sector. The polymer markets in Asia, Latin America term prospects for the market of polymer applications, as and Eastern Europe will offer opportunities for growth. In served by SIMONA, are favourable – at a global level. SIMONA Europe, meanwhile, any potential for growth is likely to come will be targeting revenue in excess of € 300 million in 2014. from product development targeted at new applications and Fundamentally, in the medium term SIMONA believes that the industries. markets outside Europe offer more favourable growth oppor tunities, as the potential for development in these markets is Operating against this background, the SIMONA Group has set more pronounced. itself ambitious goals and will be targeting sales revenue of just over € 300 million in 2013, with an EBIT margin slightly above 5 per cent. In this context, the proportion of revenue generated 8. OTHER INFORMATION outside Europe is to be further expanded. In the medium term, investments are also to be directed to a larger extent at growth Employees regions beyond Europe. In filling the key positions of Head of In response to more restrained business, the SIMONA Group Sales Area Overseas and Head of Global Process Development, slightly reduced its workforce over the course of the year. At the SIMONA has already taken an important step forward. In the end of 2012, the SIMONA Group employed 1,237 people in area of piping systems we expect to see a slight increase in total, 17 fewer than at the end of 2011. The site in Kirn saw a sales volumes and revenues over the course of 2013. This is to reduction in staffing levels, as did the site in the US following be achieved primarily by stepping up the company’s sales changes to our business model and the site in Poland. By con- activities in Central and Eastern Europe as well as in the Asian trast, the production site in China, which is still in the start-up market. phase, took on new members of staff.

Earnings performance in 2013 will be dominated by intense The overall headcount at SIMONA AG itself fell to 876 (prev. competition for major projects and the continued volatility of year: 899), mainly as a result of staff downsizing at the plants commodity prices. Commodity exchange prices for the majority in Kirn. The average number of employees within the Group of raw materials used by SIMONA trended higher again at the stood at 1,247 (prev. year: 1,248). COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 31 Report on Expected Developments Other Information

At the end of the year, 48 young people were enrolled in voca- EMPLOYEES WITHIN THE GROUP (year-end) tional programmes relating to one of seven technical and com- 1,237 mercial training courses offered by SIMONA. The number of 1,254 1,236 vocational trainees who were offered an employment contract upon successful completion of their apprenticeship programme rose significantly from 10 to 15. Two vocational trainees are enrolled in integrated degree courses which SIMONA offers in cooperation with various colleges and universities. At 31 Decem ber 2012, 7 female members of staff were on parental leave.

In 2012, SIMONA added a new integrated degree course – 2012 Plastics Engineering – to its educational programme, working in 2011 cooperation with the University of Applied Sciences Darmstadt. 2010 Furthermore, the company established SIMONA Academy, thus bringing together and expanding SIMONA’s international HR development measures and training programmes for sales and In 2012, the focus of IT was on further extending server virtual- marketing staff. The company’s German sites saw the intro isation, stepping up network security and standardising hard- duction of an occupational health management scheme. The ware and software deployment throughout the various com company also organised two Health Days for staff at the corpo- panies in the Group. All major sites now have access to video rate headquarters in Kirn. A staff survey conducted in Novem conferencing systems for more effective meetings. Additionally, ber 2012 revealed an above-average level of employee satis- the company facility in Switzerland was included in the SAP faction – also in an industry-wide comparison – with regard to system in 2012 and international processes were further con- key issues. The areas in which staff satisfaction was below solidated. average were assessed together with the works council and addressed accordingly by cross-departmental teams. We contin- Significant elements of the internal control and ued to pursue our “SIMONA geht in Führung” (SIMONA takes management system the Lead) initiative with newsletters on related topics as well as Overall responsibility for the internal control system with regard special events. The members of the Talent Promotion Circle, to the financial reporting process and the Group financial established in 2011, took part in three further modules for the reporting process rests with the Management Board. All entities purpose of preparing them for specialist and managerial included within the consolidated group have been integrated duties. SIMONA also introduced a new model aimed at bringing within this system by means of clearly defined management greater flexibility to working hours for operations personnel. and reporting structures. The Group newly created or filled key management positions in the area of operations and sales during the financial year The internal control system, which implements specific controls under review. At the same time, SIMONA remained fully com- with regard to the financial reporting process, is aimed at pro- mitted to its extensive training and HR development activities. viding reasonable assurance that annual financial statements In the last three years, external staff development costs have and consolidated financial statements can be prepared in risen not only as a percentage of sales revenue but also on a accordance with statutory requirements despite possible risks. per capita basis. The risk management system includes the full range of guide- 32

lines and measures required to identify risk and to manage risk projects relating to the automotive supply industry. As was associated with commercial operations. The policies, the the case in previous years, the pipes and fittings division saw a structural and procedural organisation as well as the processes number of specific product accreditations in response to cus- of the internal control and risk management system operated tomer and market requirements. This resulted in several audits in respect of financial reporting have been incorporated in as part of which we were able to prove to external auditors guidelines and organisational instructions that are revised reg- the efficacy of the SIMONA management systems as well as the ularly to account for the latest external and internal develop- exceptionally high quality of our products and processes. ments. As regards the financial reporting process, we consider those elements to be of significance to the internal control Following the introduction and full-scale incorporation of a new and risk management system that may potentially influence energy management system within the existing Integrated financial reporting and the overall assessment of the annual Quality and Environmental Management System in the second financial statements, including the management report. half of 2011, initial certification of the energy management These elements are as follows: system took place as early as the first half of 2012 in line with J Identification of significant areas of risk and control with an the internationally accepted DIN EN ISO 50001 standard. influence over the group-wide financial reporting process Thus, for the first time the company will be able to exploit fully J Monitoring of group-wide financial reporting process and and efficiently the existing synergies associated with these any findings therefrom at Management Board level three management systems. The objective is to ensure reliable J Preventative measures of control with regard to group energy supply at cost-effective prices as well as the provision accounting as well as subsidiaries included in the consoli- of sufficient volumes in accordance with requirements. Higher dated group energy efficiency levels provide a solid foundation for the J Measures that safeguard the appropriate IT-based prepara- reduction of manufacturing costs, as well as promoting innova- tion of items and data of relevance to financial reporting tion within the company and extending the life cycles of operat- J Monitoring of commodity price trends for accounting-related ing systems. control of procurement and sales prices within the context of price management As a company, SIMONA is aware of its responsibilities towards people and the environment. Therefore, sustainability and Quality, environment and energy environmental compatibility are central issues for SIMONA. The goal of SIMONA’s quality management system is to main- When it comes to planning new production processes and man- tain and optimise product and process quality on a contin- ufacturing methods, we are fully committed to intensifying ual and sustainable basis. Compliance with the provisions set environmental protection as an integral element of our opera- out in DIN EN ISO 9001, ISO/TS 16949 and the Pressure tions. With regard to products and applications, SIMONA’s Equipment Directive 97/23/EC is considered to be the basis “Safety and Environment” strategy is aimed at delivering effec- for achieving this goal. In the 2012 financial year, the im- tive solutions in response to market challenges in the area plementation of these management standards was again con- of environmental engineering or utilities. firmed by the successful completion of external monitoring audits. After initial certification of the quality management sys- Compensation Report tem at the production plant in Jiangmen (China) in December 2011, a follow-up audit was carried out by an external certifica- Management Board compensation tion company in 2012. The site passed this audit too. SIMONA The Supervisory Board, based on the recommendations of the again conducted interdisciplinary quality circle meetings and Personnel Committee, is responsible for determining the overall product audits in 2012, as well as taking part in various sam- compensation of the respective Management Board members. pling and approval procedures for existing and newly launched It also regularly reviews the compensation system relating to COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 33 Other Information

the Management Board. The Personnel Committee consists of than disclosing each amount by name. The resolution is valid the Supervisory Board Chairman Dr. Rolf Goessler as well as until the end of 2015. Therefore, no disclosures are made the Supervisory Board members Roland Frobel and Dr. Roland under Section 285 no. 9 a) sentences 5 to 8 of the German Reber. Compensation for the members of the Management Commercial Code (Handelsgesetzbuch – HGB). Board of SIMONA AG is calculated on the basis of the size of the company, its commercial and financial position, as well as The company’s Articles of Association contain no provisions the level and structure of compensation granted to Manage that are non-compliant with those set out in the German Stock ment Board members of similar enterprises. In addition, the Corporation Act as regards the conditions applicable to the duties and the contribution of the respective members of the appointment or removal of Management Board members as Management Board are taken into account. well as amendments to the company’s Articles of Association. In view of this, readers are asked to refer to the relevant statu- Management Board compensation is performance-based. It is tory provisions set out in Sections 84, 85, 133 and 179 of the comprised of a fixed level of remuneration as well as a variable German Stock Corporation Act (Aktiengesetz – AktG) for further component in the form of a bonus. Both of the aforementioned details. components are assessed on an annual basis. In addition, both components are subject to thorough analyses in intervals of Remuneration for the former members of the Management two to three years, based on a comparison with compensation Board amounted to € 440 thousand (prev. year: € 406 thou- figures applicable to executive staff of similar enterprises. In sand). Pension provisions for active and former members of 2012, the Supervisory Board passed a long-term incentive plan the Management Board were recognised to the full extent and for variable Management Board compensation. Calculated on amounted to € 9,081 thousand as at 31 December 2012 the basis of SIMONA Value Added (economic value added and a (prev. year: € 8,328 thousand). minimum weighted average cost of capital (WACC) of 8 per cent) for the period from 2012 to 2014, the first payment can be Supervisory Board compensation made effective from 2015. Supervisory Board compensation is calculated according to the size of the company, as well as the duties and responsibilities The fixed component of compensation is paid as a salary on a of the Supervisory Board members. The Chairman and the monthly basis. In addition, the members of the Management Deputy Chairman as well as members involved in Committees Board receive a bonus, the level of which is dependent on receive supplementary compensation. attaining specific financial targets which are calculated on the basis of the company’s earnings performance (EBIT). Total Members of the Supervisory Board receive a standard fixed compensation for the Management Board amounted to level of compensation amounting to € 10,000. The Chairman € 1,853 thousand (prev. year: € 1,512 thousand). Total com of the Supervisory Board receives an amount equivalent to pensation comprises € 1,118 thousand (prev. year: € 839 thou double the standard level of compensation; the Deputy Chair sand) in fixed-level compensation and € 735 thousand (prev. man receives an amount equivalent to one and a half times year: € 673 thousand) in bonus payments. The company does the standard level of compensation. Supervisory Board mem- not grant loans to members of the Management Board. There bers who are engaged in Committee work receive supplemen- are no share option plans or other share-based compensation tary compensation of € 5,000. All expenses associated directly programmes in place for members of the Management Board. with a position on the Supervisory Board, as well as sales tax, On 1 July 2011, the Annual General Meeting of Shareholders are reimbursed. of SIMONA AG agreed by a three-quarter majority to disclose Management Board compensation in an aggregated format, divided into fixed and performance-related components, rather 34

In addition to fixed compensation, the General Meeting shall an 15.0 per cent interest by Kreissparkasse Biberach (Biberach), be authorised to pass a resolution on a variable component of an 10.0 per cent interest by SIMONA Vermögensverwaltungs compensation, payment of which shall be dependent on gesellschaft der Belegschaft mbH (Kirn) and an 10.1 per cent whether specific corporate performance indicators have been interest by Rossmann Beteiligungs GmbH (Burgwedel). The met or exceeded. At the Annual General Meeting of Share remaining 11.06 per cent of shares in the company were in holders on 22 June 2012 no such resolution for variable com- free float. pensation components was passed for the 2012 financial year. As at 22 June 2012, members of the Management Board Supervisory Board compensation for 2012 amounted to reported a total holding of 70,860 own shares; this corresponds € 136 thousand (prev. year: € 118 thousand). The company to 11.81 per cent of the share capital of SIMONA AG. Accord- does not grant loans to members of the Supervisory Board. ing to the notification of 22 June 2012, members of the Super There are no share option plans or other share-based compen- visory Board held a total of 1,495 shares. This corresponds sation programmes in place for members of the Supervisory to 0.25 per cent of the share capital. Board. To the extent that employees hold an interest in the company’s Disclosures pursuant to Sections 289 (4) and 315 (4) HGB capital, these employees themselves directly exercise the rights and explanatory report of control associated with their shareholdings. As at 31 December 2012, the share capital of SIMONA AG was € 15,500,000, divided into 600,000 no-par-value bearer shares The appointment and the removal of members of the Manage (“Stückaktien” governed by German law). Thus, it remained ment Board are governed by the statutory provisions set out in unchanged in the 2012 financial year. The shares are traded in Sections 84 and 85 of the German Stock Corporation Act the General Standard of the German stock exchange in Frank (Aktiengesetz – AktG) as well as by Section 9 of the Articles of furt as well as on the Berlin securities exchange. There are no Association of SIMONA AG. Under these provisions, the Man different categories of share or shares furnished with special agement Board of the company consists of at least two mem- rights. Each share is equipped with one vote at the General bers. The appointment of deputy members of the Management Meeting of Shareholders. In view of the fact that a sharehold- Board is permitted. The Management Board generally has a er’s right to a certificate of ownership interests has been chairman to be appointed by the Supervisory Board. The Super precluded under the company’s Articles of Association, the visory Board is entitled to transfer to a Supervisory Board com- share capital of our company is represented only in the form of mittee the duties relating to the conclusion, amendment and a global certificate, which has been deposited with Clearstream termination of Management Board employment contracts. Any Banking AG, Frankfurt am Main. Therefore, our shareholders amendments to the Articles of Association must be made in will in future only have an interest as co-owners in the collective accordance with the statutory provisions set out in Section 179 holdings of the no-par-value shares in our company, as held et seq. of the German Stock Corporation Act. by Clearstream Banking AG, according to their interest in the company’s share capital. We shall no longer issue effective According to Section 6 of the Articles of Association, the com- share certificates. As far as the Management Board is aware, pany is entitled to issue share certificates that embody one there are no restrictions affecting voting rights or the transfer share (single certificate) or multiple shares (global certificates). of shares. At present there are no significant agreements containing a An 30.79 per cent interest was held by Dr. Wolfgang und Anita change of control provision that would apply in the event of a Bürkle Stiftung (Kirn), an 11.64 per cent interest by Dirk Möller takeover bid. (Kirn), an 11.41 per cent interest by Regine Tegtmeyer (Seelze), COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 35 Other Information

At present there are no agreements with members of the Management Board or with employees relating to compensation payments in the event of a change of control.

Forward-looking statements and forecasts This Group management report contains forward-looking statements that are based on the current expectations, presump- tions and forecasts of the Management Board of SIMONA AG as well as on information currently available to the Manage ment Board. These forward-looking statements shall not be interpreted as a guarantee that the future events and results to which they refer will actually materialise. Rather, future circumstances and results depend on a multitude of factors. These include various risks and imponderables, as well as being based on assumptions that may conceivably prove to be incor- rect. SIMONA AG shall not be obliged to adjust or update the forward-looking statements made in this report.

Closing statement We hereby declare that to the best of our knowledge the management report conveys the course of business, the financial performance and the material opportunities and risks associated with the expected development of the SIMONA Group.

Kirn, 28 March 2013 SIMONA Aktiengesellschaft

The Management Board Group Financial Statements 2012

37 Group Income Statement 38 Group Statement of Comprehensive Income 39 Group Statement of Financial Position 40 Notes to Group Financial Statements 71 Group Statement of Cash Flows 72 Group Statement of Changes in Equity 74 Details of Shareholdings 75 Auditorʼs Report 76 Other Information COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 37 Group Income Statement

Group Income Statement of SIMONA AG for the 2012 Financial Year

in € ’000 Notes 01/01 – 31/12/2012 01/01 – 31/12/2011 Revenue [7] 293,230 308,499 Other operating income 6,567 6,539 Changes in inventories of finished goods –486 2,517 Cost of materials 169,275 177,519 Staff costs [8] 57,612 58,620 Amortisation of intangible assets and depreciation of property, plant and equipment [15], [16] 11,436 11,931 Other operating expenses [10] 47,168 49,681 Income from equity investments 600 650 Interest income [11] 630 659 Interest expense [11] 284 392 Profit before taxes 14,766 20,721 Income tax expense [12] 3,267 4,482 Profit for the period 11,499 16,239 of which attributable to: Owners of the parent company 11,442 16,177 Non-controlling interests 57 62

EARNINGS PER SHARE in € – basic, calculated on the basis of profit for the period attributable to ordinary shareholders of the parent company [13] 19.07 26.96 – diluted, calculated on the basis of profit for the period attributable to ordinary shareholders of the parent company [13] 19.07 26.96 38

Group Statement of Comprehensive Income of SIMONA AG for the 2012 Financial Year

in € ’000 01/01 – 31/12/2012 01/01 – 31/12/2011 Profit for the period 11,499 16,239 Exchange differences on translating foreign operations during the year 250 191 Amount recognised directly in equity 250 191

Total comprehensive income 11,749 16,430 of which attributable to: Owners of the parent company 11,711 16,392 Non-controlling interests 38 38 COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 39 Group Statement of Comprehensive Income Group Statement of Financial Position

Group Statement of Financial Position of SIMONA AG for the 2012 Financial Year

ASSETS

in € ’000 Notes 31/12/2012 31/12/2011 Intangible assets [15] 1,175 1,280 Property, plant and equipment [16] 90,879 89,229 Financial assets [29] 23 23 Non-current tax assets [19] 2,612 3,205 Deferred tax assets [12] 372 174 Non-current assets 95,061 93,911 Inventories [17] 56,932 57,283 Trade receivables [18] 43,283 42,606 Other assets and prepaid expenses [19] 6,916 6,914 Other financial assets [29] 20,994 30,227 Cash and cash equivalents [20] 36,934 26,139 Current assets 165,059 163,169 Total assets 260,120 257,080

EQUITY AND LIABILITIES

in € ’000 Notes 31/12/2012 31/12/2011 Equity attributable to owners of the parent company Issued capital 15,500 15,500 Capital reserves 15,274 15,274 Revenue reserves 149,444 143,702 Other reserves 224 –45 180,442 174,431 Non-controlling interests 239 201 Total equity [21] 180,681 174,632 Financial liabilities [22] 66 4,728 Provisions for pensions [23] 40,231 39,311 Other provisions [25] 4,994 5,450 Other liabilities 118 172 Deferred tax liabilities [12] 4,134 5,187 Non-current liabilities 49,543 54,848 Financial liabilities [22] 3,812 312 Provisions for pensions [23] 1,457 1,327 Other provisions [25] 2,024 2,245 Trade payables 11,266 11,223 Income tax liabilities 1,960 1,153 Other liabilities and deferred income 9,299 11,217 Derivative financial instruments [28], [29] 78 123 Current liabilities 29,896 27,600 Total equity and liabilities 260,120 257,080 40

Notes to Group Financial Statements of SIMONA AG for the 2012 Financial Year

[1] COMPANY INFORMATION [2] ACCOUNTING POLICIES

SIMONA AG is a stock corporation (Aktiengesellschaft) founded Basis of preparation in Germany – registered office at Teichweg 16, 55606 Kirn, The consolidated financial statements are prepared using Germany. Its shares are traded within the General Standard of the historical cost principle, with the exception of derivative the Frankfurt and Berlin Stock Exchanges. The Group Financial financial instruments and available-for-sale financial assets, Statements of SIMONA AG for the financial year ended which are measured at fair value. The consolidated financial 31 December 2012 were scheduled to be released by the statements are prepared in euro. Unless otherwise stated, Management Board on the basis of a resolution of 2 April 2013 all amounts are rounded to € ’000. for the purpose of forwarding them to the Supervisory Board. Statement of compliance with IFRS The activities of SIMONA AG mainly include the production and The Group Financial Statements of SIMONA AG and the entities sale of semi-finished products in the form of sheets, rods, included in the consolidated group for the period ended 31 welding rods and profiles as well as pipes, fittings and finished December 2012 have been prepared in accordance with the parts made of thermoplastics. International Financial Reporting Standards (IFRS) applicable at the reporting date, as adopted by the European Union, and The semi-finished products are manufactured at the plant in the provisions of commercial law to be applied additionally pur- Kirn (Germany) as well as in Hazleton (USA) and Jiangmen suant to Section 315a(1) of the German Commercial Code (China). Pipes and fittings are produced at the plant in Rings (Handelsgesetzbuch – HGB). heim (Germany). The plant in Litvinov (Czech Republic) manufactures semi-finished products, pipes and fittings. The The term “IFRS” comprises all International Financial Reporting products are marketed under the joint SIMONA brand as Standards (IFRS) and International Accounting Standards well as a range of separate brands. (IAS) to be applied on a mandatory basis as at the reporting date. Additionally, all interpretations issued by the International SIMONA AG maintains a sales office in Moehlin, Switzerland. Financial Reporting Standards Interpretations Committee (IFRS IC) – formerly Standing Interpretations Committee (SIC) – In addition, distribution is conducted via subsidiaries in were applied insofar as their application was mandatory for the United Kingdom (SIMONA UK Ltd., Stafford, United the 2012 financial year. Kingdom), France (SIMONA S.A.S., Domont, France), Italy (SIMONA S.r.l., Vimodrone, Italy), Spain (SIMONA IBERICA The consolidated financial statements consist of the financial SEMIELABORADOS S.L., Barcelona, Spain), Poland (SIMONA statements of SIMONA AG and its subsidiaries as at 31 Decem POLSKA Sp. z o.o., Wrocław, Poland, DEHOPLAST POLSKA Sp. ber of each financial year (hereinafter also referred to as z o.o., Kwidzyn, Poland), Czech Republic (SIMONA-PLASTICS “Group” or “SIMONA Group”). CZ, s.r.o., Prague, Czech Republic, SIMONA Plast-Technik s.r.o., Litvinov, Czech Republic), China (SIMONA FAR EAST Ltd. The Group statement of financial position conforms with the Hong Kong, China, SIMONA ENGINEERING PLASTICS TRADING presentation requirements of IAS 1. Various items reported in Co. Ltd, Shanghai, China, SIMONA ENGINEERING PLASTICS the income statement and the statement of financial position (Guangdong) Co. Ltd., Jiangmen, China), the United States have been aggregated for the purpose of improving the overall (SIMONA AMERICA Inc., Hazleton, USA) and the Russian Feder clarity of presentation. These items are disclosed and dis- ation (OOO SIMONA RUS, Moscow, Russian Federation). cussed separately in the notes to the consolidated financial statements. COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 41 Notes

Principles of consolidation tion was not yet mandatory in the 2012 financial year. The The consolidated financial statements comprise the accounts Group will not apply these Standards and Interpretations for an of SIMONA AG and its subsidiaries for each financial year earlier period. ended 31 December. The financial statements of SIMONA AG and the subsidiaries are prepared using uniform accounting J IFRS 1 “Severe Hyperinflation and Removal of Fixed Dates policies for the same reporting period. for First-time Adopters” J IFRS 7 “Disclosures: Offsetting Financial Assets and All intragroup balances (receivables, liabilities, provisions), Financial Liabilities” transactions, income and expenses as well as profits and losses J IFRS 10 “Consolidated Financial Statements” from transactions between consolidated entities (“intercom- J IFRS 11 “Joint Arrangements” pany profits/losses”) are eliminated as part of consolidation. J IFRS 12 “Disclosure of Interests in Other Entities” J IFRS 13 “Fair Value Measurement” Subsidiaries are fully consolidated effective from the acquisi- J IAS 1 “Presentation of Items of Other Comprehensive tion date, which is the date on which the Group effectively Income” obtains control. Inclusion in the consolidated financial state- J IAS 12 “Deferred Tax: Recovery of Underlying Assets” ments ends as soon as the parent ceases to control the sub J IAS 19 “Employee Benefits” sidiary. Changes in a parent’s ownership interest in a subsidiary J IAS 27 “Separate Financial Statements” that do not result in a loss of control are accounted for as J IAS 28R “Investments in Associates and Joint Ventures” equity transactions. J IAS 32 “Offsetting Financial Assets and Financial Liabilities” J IFRIC 20 “Stripping Costs in the Production Phase of a Non-controlling interests are disclosed separately in the Group Surface Mine” income statement and within equity of the Group statement of financial position. The standards IFRS 10 “Consolidated Financial Statements”, IFRS 11 “Joint Arrangements” and IFRS 12 “Disclosure of Interests in Other Entities” were issued in May 2011 and are to [3] NEW FINANCIAL REPORTING STANDARDS be applied for annual periods beginning on or after 1 January 2014. The implications of these standards with regard to the 3.1 Accounting standards applicable for the first time in the financial position, financial performance and cash flows of financial year the Group are currently being analysed. The accounting standards to be applied for the first time in the financial year 2012 had no material impact on the presentation With the exception of IAS 19, application of the other standards of the financial position, financial performance and cash flows. and interpretations will have no significant implications for the future financial statements issued by the SIMONA Group. 3.2 Issued standards and interpretations which have not yet IAS 19 (amended) was issued in June 2011 and must be been applied (EU endorsement completed) applied by entities for annual periods beginning on or after 1 The International Accounting Standards Board (IASB) and the January 2013. The amendments made range from fundamen- International Financial Reporting Standards Interpretations tal changes, e.g. with regard to determining the return on plan Committee (IFRS IC) issued the following Standards and Inter assets and the elimination of the corridor method, which was pretations which have already been adopted by the European aimed at distributing or smoothing the volatility resulting from Union as part of the comitology procedure but whose applica- pension obligations over a time period, to mere clarifications and rewordings as well as new and amended disclosures in the notes. 42

The SIMONA Group currently recognises actuarial gains and the amounts recognised in the financial statements. Within this losses as income or expense if the net cumulative unrecognised context, decisions containing estimates have not been taken actuarial gains and losses at the end of the previous reporting into account. Among other aspects, significant estimates relate period exceeded the greater of 10 per cent of the present value to the useful lives of assets. of the defined benefit obligation at that date (before deducting plan assets) and 10 per cent of the fair value of any plan assets Material judgements relate to the classification of leases, the at that date. recognition of provisions, the estimation or assessment of the recoverability or possible impairment of trade receivables, On first-time application of the amended standard in the inventories and deferred tax assets, as well as the assessment financial year 2013, based on our preliminary estimation, the of factors that may indicate an impairment of assets. amount recognised in provisions is likely to increase by € 18,935 thousand as at 31 December 2012. Group profit Uncertainties relating to estimates would decrease by € 1,263 thousand and other comprehensive The following section outlines the most important forward-look- income by € 22,151 thousand. ing assumptions as well as other material uncertainty regarding the use of estimates, applicable at the reporting date, as a 3.3 Issued standards and interpretations which have not yet result of which there is a significant risk that the carrying been applied (EU endorsement pending) amounts of assets and liabilities may require material adjust- The IASB and IFRS IC issued the following Standards and ments within the coming financial year. Interpretations that were not yet applicable in the 2012 financial year. These Standards and Interpretations have yet to be Impairment of goodwill adopted by the European Union and are therefore not applied The Group performs impairment tests for goodwill at least once by the Group. per year. This requires estimates to be made with regard to the value in use of cash-generating units to which goodwill is J IFRS 1 “Government Loans” allocated. For the purpose of estimating the value in use, the J IFRS 9 “Financial Instruments: Classification and Group has to determine, on the basis of estimates, the pro- Measurement” jected cash flows associated with the cash-generating unit, as J IFRS 7 and IFRS 9 “Disclosures: Effective Date and well as selecting an appropriate discount rate in order to Transition” determine the present value of the aforementioned cash flows. J IFRS 10, IFRS 11 and IFRS 12 “Transition” As at 31 December 2012, the carrying amount of goodwill J IFRS 10, IFRS 12 and IAS 27 “Investment Entities” was € 143 thousand (prev. year: € 143 thousand). J Improvements to IFRS (2009 – 2011) Impairment of non-financial assets Application of the aforementioned standards and interpreta- The Group determines at the end of each reporting period tions is unlikely to have significant implications for the future whether there are observable indications that a non-financial financial statements issued by the SIMONA Group. asset or group of non-financial assets is impaired. For the purpose of determining the value in use, the future expected cash flows are discounted to their present value using a [4] MATERIAL JUDGEMENTS AND ESTIMATES pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Judgements An appropriate valuation model is applied for the purpose of When applying the accounting policies, the management made determining the fair value. The Group bases its impairment the following judgements with the most significant effect on tests on detailed budget calculations that are prepared sepa- COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 43 Notes

rately for each cash-generating unit. Budget planning spans a acquirer measures components of non-controlling interests period of five years. As regards periods beyond this time frame, either at fair value or at the proportionate share in the recog- long-term growth rates are determined and applied to the pro- nised amounts of the acquiree’s identifiable net assets. jection of future cash flows beyond five years. Acquisition-related costs are accounted for as expenses and presented as administration costs. Deferred tax assets Deferred tax assets are recognised for the carryforward of On first-time recognition, goodwill is measured at cost, being unused tax losses to the extent that it is probable that future the excess of the consideration transferred and the amount of taxable profit will be available against which the unused tax any non-controlling interest in the acquiree over the net of losses can be utilised. The process of determining the level of the acquisition-date amounts of the identifiable assets acquired deferred tax assets requires significant judgement by the and the liabilities assumed. If the consideration transferred management with regard to the timing and amount of future is lower than the fair value of the net assets of the acquired taxable profit as well as the future tax planning strategies. subsidiary, the difference is accounted for in profit and loss. For further details, please refer to Note [12]. After initial recognition, goodwill is measured at cost less Provisions accumulated impairment losses. For the purpose of impairment Provisions are recognised in accordance with the accounting testing, as from the date of acquisition goodwill acquired as policies discussed in Note [25]. In determining the level of part of a business combination is allocated to those cash-gen- provisions, the management is required to make significant erating units of the Group that are expected to benefit from judgements as to the timing and the amounts of future out- the business combination. This method is applied regardless of flow of resources. whether other assets or liabilities of the acquiree are allocated to these cash-generating units. Pensions Expenses relating to defined benefit plans are determined on b) Business combinations prior to 1 January 2010 the basis of actuarial methods. Actuarial valuation is conducted The method previously applied to the recognition and measure- on the basis of assumptions in respect of discount rates, future ment of business combinations differed from the approach salary increases, mortality and future pension increases. In outlined above: view of the long-term orientation of such plans, these estimates are associated with significant uncertainty. For further details, Business combinations were accounted for by applying the please refer to Note [23]. acquisition method. Transaction costs directly attributable to the acquisition represented part of the cost of the business combination. The non-controlling interest (previously referred to [5] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES as minority interests) was measured at the corresponding pro-rata share of the identifiable net assets of the acquiree. Business combinations All business acquisitions of the Group were transacted prior to a) Business combinations as from 1 January 2010 1 January 2010. Business combinations are accounted for by applying the acquisition method. The cost of a business combination is calcu- Currency translation lated as the sum of the consideration transferred, measured at Annual financial statements prepared by the consolidated the acquisition-date fair value, and any non-controlling interest Group entities in a foreign currency are translated on the basis in the acquiree. In the case of each business combination, the of the functional currency method. The functional currency is 44

the currency of the primary economic environment in which the Non-monetary items that are measured at historical cost of entities operate, which in the case of the Group companies purchase or conversion in a foreign currency are translated at of SIMONA AG is the respective local currency. The consolidated the foreign exchange rate applicable on the day of the trans financial statements are prepared in euro. action. Non-monetary items that are measured at fair value in the foreign currency are translated at the rate that was pre Those foreign entities whose functional currencies differ from vailing at the time the fair value was determined. the euro have been presented below, together with details of their functional currency: In the consolidated financial statements expenses and income J SIMONA UK Ltd., Stafford, United Kingdom – Pound Sterling associated with financial statements of subsidiaries prepared J SIMONA POLSKA Sp. z o.o., Wrocław/Poland – Polish Zloty in a foreign currency are translated on the basis of the year- J DEHOPLAST POLSKA Sp. z o.o., Kwidzyn, Poland – average exchange rate, whereas assets and liabilities are trans- Polish Zloty lated on the basis of the closing rate. Exchange differences J SIMONA-PLASTICS CZ, s.r.o, Prague, Czech Republic – arising from the translation of equity as well as exchange differ- Czech Koruna ences arising from the use of exchange rates in the income J SIMONA Plast-Technik s.r.o., Litvinov, Czech Republic – statement that differ from those used for the translation of Czech Koruna items presented in the statement of financial position are rec- J SIMONA FAR EAST Ltd., Hong Kong, China – ognised in other reserves. Hong Kong Dollar J SIMONA ASIA Ltd., Hong Kong, China – Hong Kong Dollar On the disposal of a foreign operation, the cumulative amount J SIMONA AMERICA Inc., Hazleton, USA – US Dollar of the exchange differences accounted for in respect of the J 64 NORTH CONAHAN DRIVE HOLDING LLC, Hazleton, USA – foreign operation is recognised in profit or loss. US Dollar J SIMONA ENGINEERING PLASTICS TRADING Co. Ltd., Property, plant and equipment Shanghai, China – Renminbi All items classified as property, plant and equipment are used J SIMONA ENGINEERING PLASTICS (Guangdong) Co. Ltd., for operational purposes and are measured at cost less depre- Jiangmen, China – Renminbi ciation on a systematic basis. Depreciation of property, plant J OOO SIMONA RUS, Moscow, Russian Federation – and equipment is performed on a straight-line basis in accord- Russian rouble ance with the pattern of use of such items. To the extent that The items accounted for in the respective financial statements depreciable assets of property, plant and equipment have dif- are measured on the basis of the functional currency. Foreign ferent useful lives, the respective components of these assets currency transactions are translated initially between the func- are depreciated separately. tional currency and the foreign currency at the arithmetic mean rate applicable on the day of the transaction. All exchange dif- The carrying amounts of property, plant and equipment attribu ferences are recorded in profit or loss for the period. This does table to a cash-generating unit are tested for impairment as not include monetary items that have been designated as part soon as there are indications that the carrying amount of the of a hedge of a net investment by the Group in a foreign opera- assets of this cash-generating unit exceeds its recoverable tion. They are recognised in other comprehensive income amount. Items of property, plant and equipment are derecogni until disposal of the net investment; the cumulative amount is sed upon disposal. Gains and losses arising from the derecog- reclassified in profit and loss only upon disposal. Taxes arising nition of an item of property, plant and equipment are deter- from exchange differences relating to these monetary items are mined as the difference between the net disposable proceeds also recognised directly in other comprehensive income. and the carrying amount of the item; these gains and losses are included in profit or loss when the item is derecognised. COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 45 Notes

The residual values of assets as well as the useful lives and with a finite useful life are amortised on the basis of the length depreciation methods are assessed at the end of each finan- of that useful life. Amortisation of intangible assets, with the cial year and are adjusted where necessary. exception of capitalised development costs, is performed over a useful life of between three and five years. Leasing Whether an agreement constitutes a lease is determined on the Research and development costs basis of the substance of the transaction detailed in the agree- The research and development activities conducted by SIMONA ment at the time the agreement is concluded. This requires an AG are directed principally at the optimisation of production assessment as to whether the fulfilment of the contractual and manufacturing processes (advancement within the area of agreement is dependent on the use of a specific asset or spe- process engineering), at changes and improvements to for cific assets and whether the agreement grants the right to use mulae, some of which have been in existence for an extensive the asset/assets even if this right is not specifically defined in period of time, or at fundamental improvements for the pur- the agreement. pose of meeting specified quality and inspection requirements, including new testing procedures and new areas of application. Finance leases, which transfer to the Group substantially all the Generally, these activities do not involve the development of risks and rewards incidental to ownership of an asset, are rec- an entirely new product that would sever the link with existing ognised as assets in the statement of financial position at the formulae and manufacturing processes. commencement of the lease term. As at 31 December 2012, no such finance leases existed within the Group. To the extent that research and development activities provide the basis for a product that is technically feasible and from Lease payments under an operating lease are recognised in which the Group can generate future economic benefits, the the income statement as an expense on a straight-line basis period attributable to general research activities constitutes the and are presented as other operating expense. major part thereof. The scale of development expenses arising after the product has been made marketable is negligible. In Borrowing costs consideration of the principle of materiality the intangible asset Borrowing costs that are directly attributable to the acquisition, is not capitalised in such cases. This approach does not construction or production of a qualifying asset, which is adversely effect the true and fair view of the Group’s state of defined as an asset that necessarily takes a substantial period affairs as regards financial performance, financial position of time to get ready for its intended use or sale, form part of and cash flows. the cost of that asset and are capitalised accordingly. All other borrowing costs are recognised as an expense in the period in In addition, SIMONA AG does not capitalise development costs which they are incurred. Borrowing costs are interest and other to the extent that costs (expenditure) cannot be reliably costs that an entity incurs in connection with the borrowing of allocated to development projects. The costs are recognised as funds. No borrowing costs have been capitalised by the Group, expense in the period in which they are incurred. as it does not possess qualifying assets. There were no development projects resulting in the capitali Intangible assets sation of intangible assets in 2012 or 2011. Acquired and internally generated intangible assets are capitalised in accordance with IAS 38 if it is probable that the intan Impairment of assets gible asset will generate future economic benefits and the costs The Group assesses at each reporting date whether there is of the intangible asset can be reliably measured. They are any indication that an asset may be impaired. If such indica- measured at cost of purchase or conversion. Intangible assets tions are present or an annual impairment test of an asset is 46

required, the Group makes an estimate of the recoverable value through profit or loss, transaction costs directly attributa- amount. The recoverable amount of an asset or a cash-gener- ble to the acquisition of the asset are accounted for accord- ating unit is the higher of its fair value less costs of disposal ingly. The designation of financial assets to the respective meas- and its value in use. If the recoverable amount of an asset, or urement categories occurs upon initial recognition. To the of all assets of a cash-generating unit, is less than its carry- extent that they are permitted and necessary, reclassifications ing amount, the carrying amount of the asset or the cash-gen- are performed at the end of the financial year. No reclassifi erating unit shall be reduced to its recoverable amount. That cations have been performed to date. reduction is an impairment loss. All regular way purchases or sales of financial assets are Impairment of non-financial assets accounted for at the date of settlement. A regular way purchase The Group determines at the end of each reporting period or sale is a purchase or sale of a financial asset under a con- whether there are observable indications that a non-financial tract whose terms require delivery of the asset within the time asset or group of non-financial assets is impaired. If such frame established generally by regulation or convention in the indications are present or if an annual impairment test of an marketplace concerned. asset of a group of assets is required, the Group makes an estimate of the recoverable amount of each asset or of the The group of financial assets at fair value through profit or loss group of assets. The recoverable amount of an asset or a cash- comprises financial assets held for trading. A financial asset generating unit is the higher of its fair value less costs of dis- is classified as held for trading if it is acquired principally for the posal and its value in use. Impairment losses are recognised in purpose of selling it in the near term. Derivatives, including profit or loss within the expense category that corresponds to embedded derivatives accounted for separately, are also classi- the function of the impaired asset. fied as held for trading, with the exception of those derivatives that are designated and effective hedging instruments. Gains For the purpose of determining the value in use, the future and losses on financial assets held for trading are recognised expected cash flows are discounted to their present value using in profit or loss. The Group has not made use of the option a pre-tax discount rate that reflects current market assess- to designate financial assets or liabilities as “measured at fair ments of the time value of money and the risks specific to the value through profit or loss”. asset. The Group bases its impairment tests on detailed budget and forecasting calculations that are prepared separately for Derivatives embedded within a host contract are recognised each of the Group’s cash-generating units to which individual separately at their fair value if their economic characteristics assets are assigned. Such budget and forecasting calculations and risks are not closely related to those of the host contract generally cover a period of five years. As regards periods and the host contracts are not held for trading purposes or are beyond this time frame, long-term growth rates are determined not designated as “at fair value through profit or loss”. These and applied to the projection of future cash flows subsequent embedded derivatives are measured at their fair value; changes to the fifth year. to the fair value are recognised in profit or loss. A reassess- ment is performed only upon amendments to the contractual Investments and other financial assets terms and conditions if this leads to a significant change to the Financial assets within the meaning of IAS 39 are classified cash flows that would otherwise have resulted from the either as financial assets at fair value through profit or loss, as contract. loans and receivables, as held-to-maturity investments or as available-for-sale financial assets. On initial recognition the Non-derivative financial assets, quoted in an active market, financial assets are measured at fair value. Additionally, in the with fixed or determinable payments and fixed maturity that an case of financial assets other than those classified as at fair entity has the positive intention and ability to hold to maturity COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 47 Notes

are classified as held-to-maturity investments. After initial rec- transaction costs, and all other premiums or discounts, minus ognition held-to-maturity investments are measured at amor- any reduction for impairments. tised cost using the effective interest method. Gains or losses are recognised in profit or loss when the financial asset is A financial asset (or a part of a financial asset or a part of a derecognised or impaired, and through the amortisation proc- group of similar financial assets) is derecognised when the con- ess. tractual rights to the cash flows from the financial asset expire.

Loans and receivables are non-derivative financial assets with Impairment of financial assets fixed or determinable payments that are not quoted in an The Group determines at the end of each reporting period active market. After initial recognition loans and receivables are whether there is any objective evidence that a financial asset measured at amortised cost using the effective interest or group of financial assets is impaired. If there is objective method, less impairments where applicable. Gains or losses evidence that an impairment loss on financial assets carried at are recognised in profit or loss when the loans and receivables amortised cost has been incurred, the amount of the impair- are derecognised or impaired, and through the amortisation ment loss is measured as the difference between the asset’s process. carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective Available-for-sale financial assets are those non-derivative interest rate, i.e. the effective interest rate computed at ini- financial assets that are designated as available for sale or are tial recognition. The carrying amount of the asset is reduced not classified within one of the three above-mentioned cate through use of an allowance account. The amount of the gories. After initial recognition available-for-sale financial assets impairment loss is recognised in profit or loss. If, in a subse- are measured at fair value. Unrealised gains and losses on quent period, the amount of the impairment loss decreases available-for-sale financial assets are recognised directly in and the decrease can be related objectively to an event occur- equity. If an available-for-sale financial asset is derecognised or ring after the impairment was recognised, the previously recog- impaired, the cumulative gain or loss previously recognised in nised impairment loss is reversed. However, the new carry- equity is recognised in profit or loss. ing amount must not exceed the amortised cost at the date the impairment is reversed. The amount of the reversal is recog- The fair value of financial instruments traded within organised nised in profit or loss. and active markets is determined on the basis of the market price quoted at the end of the reporting period. The fair value If in the case of trade receivables there is objective evidence of financial instruments for which no active market exists is that not all due amounts will be received in accordance with determined on the basis of valuation techniques. Valuation the agreed invoicing terms and conditions (e.g. likelihood of an techniques include using recent arm’s length market transac- insolvency or significant financial difficulties of the obligor), the tions between knowledgeable, willing parties, if available, carrying amount is reduced through use of an allowance reference to the current fair value of another instrument that is account. Receivables are derecognised when they are consid- substantially the same, discounted cash flow analysis and ered to be uncollectible. other valuation models. As regards available-for-sale financial assets, the Group deter- Held-to-maturity investments as well as loans and receivables mines at the end of each reporting period whether there is any are measured at amortised cost. The calculation includes objective evidence that a financial asset or group of financial all fees and points paid or received between parties to the con- assets is impaired. When determining the impairment of debt tract that are an integral part of the effective interest rate, instruments classified as available for sale, the same criteria 48

are used as those applied to financial assets measured at the consideration received, having deducted the transaction amortised cost. The amount recognised for impairments, how- costs relating to the origination of the loan. After initial recogni- ever, is the cumulative loss determined as the difference tion interest-bearing borrowings are measured at amortised between the amortised cost and the current fair value less any cost using the effective interest method. A financial liability is impairment losses of this instrument recognised in profit or derecognised when the obligation specified in the contract loss on an earlier occasion. is discharged, cancelled or when it expires.

Inventories Cash and cash equivalents Inventories are stated at the lower of purchase or conversion Cash and cash equivalents recognised in the statement of cost and current cost or net realisable value. financial position comprise cash on hand, bank balances and short-term deposits with original maturities of less than three The inventories associated with consumables have been capi- months. talised at average historical cost. As part of Group accounting, the cost of raw materials is assigned mainly by using the first- As regards the Group statement of cash flows, cash and cash in, first-out (FIFO) method. Finished goods are measured at equivalents comprise the aforementioned cash items in manufacturing cost (cost of conversion) according to item-by- addition to overdrafts used by the Group and securities that item calculations based on current operational accounting; in are readily convertible to cash. addition to the directly related cost of direct material and units of production, this item also includes special production costs Other provisions as well as production and material overheads, including depre- Other provisions are recognised when an obligation exists ciation. Financing costs are not accounted for in the cost of towards a third party, settlement of this obligation is probable conversion. All identifiable risks associated with inventories, and a reliable estimate can be made of the amount of the particularly relating to holding periods in excess of average required provision. Other provisions are measured at aggregate duration, diminished usability and net realisable value, are rec- costs. Long-term provisions with more than one year to matu- ognised by an appropriate write-down. rity are recognised at their discounted settlement value as at the end of the reporting period. The net realisable value is the estimated selling price achievable in the ordinary course of business, less the estimated costs Pensions incurred until completion and the estimated costs necessary to The Group has direct pension plans as well as one indirect make the sale. pension plan. The indirect pension plan is serviced by SIMONA Sozialwerk GmbH, which manages the plan assets. The plan Financial liabilities assets are accounted for in the Group statement of financial Financial liabilities within the meaning of IAS 39 are classified position such that the fair value of those assets of SIMONA either as financial liabilities measured at fair value or as Sozialwerk GmbH and SIMONA Vermögensverwaltungsgesell loans. The Group determines the classification of its financial schaft der Belegschaft mbH that fulfil the requirements for plan liabilities upon initial recognition. All financial liabilities are assets are deducted from the benefit obligation of the Group measured at fair value upon initial recognition. The Group’s (funding company) when measuring the pension provision to be financial liabilities comprise trade payables, other payables, recognised. The fair value of the plan assets is based on infor- bank overdrafts, loans and derivative financial instruments. mation regarding the market price; in the case of public securities, it corresponds to the published purchase price. As the Interest-bearing borrowings requirements for plan assets specified in IAS 19.7 have been On initial recognition, loans are measured at the fair value of fulfilled, the deduction of the plan assets from the obligation COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 49 Notes

of the Group does not give rise to an obligation to consolidate Revenue recognition on the part of SIMONA Sozialwerk GmbH and SIMONA Ver Revenue is recognised when it is probable that the economic mögensverwaltungsgesellschaft der Belegschaft mbH because benefits associated with a transaction will flow to the Group their sole purpose is to service the pension obligations. and the amount of revenue can be measured reliably. Addition ally, the following conditions must be satisfied for the rec Provisions for pensions are accounted for on the basis of the ognition of revenue: Projected Unit Credit Method (sometimes known as the accrued benefit method pro-rated on service or as the benefit/years a) Sale of goods of service method) (IAS 19). As part of this process, besides Revenue is recognised when the Group has transferred to the pensions and benefits known as at the end of the reporting buyer the significant risks and rewards of ownership of the period, expected future increases in salaries and pensions are goods. accounted for with sufficient reliability. The calculation is based on actuarial reports that take into account specific biometric b) Interest data. Actuarial gains and losses are recognised as income or Revenue is recognised using the effective interest method when expense if the net cumulative unrecognised actuarial gains and the interest arises. losses at the end of the previous reporting period exceeded the greater of 10 per cent of the present value of the defined Taxes benefit obligation at that date (before deducting plan assets) a) Current tax assets and current tax liabilities and 10 per cent of the fair value of any plan assets at that date. Current tax assets and current tax liabilities for current and prior periods are measured at the amount expected to be paid to or The amount recognised as a defined benefit liability is the net recovered from the taxation authorities, using the tax rates and total of the present value of the defined benefit obligation at tax laws that have been enacted or substantively enacted by the end of the reporting period plus any actuarial gains (less the end of the reporting period. Management regularly assess- any actuarial losses) not recognised minus any past service es individual tax issues as to whether there is any room for cost not yet recognised minus the fair value at the end of the interpretation on the basis of applicable tax regulations. Where reporting period of plan assets out of which the obligations required, tax provisions are recognised. are to be settled directly. Past service cost not yet vested is recognised as an expense on a straight-line basis over the aver- b) Deferred taxes age period until the benefits become vested. Past service cost Applying the liability method, deferred taxes are recognised is recognised as an expense to the extent that benefits become for all temporary differences between the carrying amount of vested immediately following the introduction of, or changes to, an asset or liability in the statement of financial position and a pension plan. its tax base as well as in connection with consolidation procedures. Additionally, a deferred tax asset is recognised for all Government grants deductible temporary differences to the extent that it is proba- A government grant is not recognised until there is reasonable ble that taxable profit will be available against which the assurance that the entity will comply with the conditions deductible temporary difference can be utilised. Deferred tax attaching to it, and that the grant will be received. Grants assets and liabilities are measured at the tax rates that are related to income are presented as part of profit or loss under expected to apply to the period when the asset is realised or the heading of “other operating income” and are recognised the liability is settled, based on tax rates (and tax laws) that on a systematic basis over the periods in which the entity rec- have been enacted or substantively enacted by the end of the ognises as expenses the related costs for which the grants reporting period. are intended to compensate. 50

Deferred taxes are recognised for all taxable and deductible [6] SEGMENT REPORTING temporary differences, with the exception of: J Deferred tax liabilities from the initial recognition of good- For company management purposes, the Group is organised will or of an asset or liability in a transaction which is not a according to geographic regions and has the three following business combination and, at the time of the transaction, reportable operating segments: affects neither accounting profit nor taxable profit/tax loss. J Germany J Deferred tax liabilities for taxable temporary differences J Rest of Europe and Africa associated with investments in subsidiaries if the timing of J Asia, Americas and Australia the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not All three segments generate their revenues mainly through the reverse in the foreseeable future. sale of semi-finished plastics and pipes, as well as fittings and finished parts. Deferred tax assets and deferred tax liabilities are offset if the Group has a legally enforceable right to set off current tax Management assesses the operating results of these segments assets and current tax liabilities and if they relate to the income for the purpose of making decisions as to the distribution of taxes of the same taxable entity, imposed by the same taxation resources and determining the profitability of the business units. authority. Segment profitability is determined on the basis of operating results from operating activities before the effects of financing c) Value added tax activities and excluding income tax effects. Sales revenues, expenses and assets are recognised after deduction of value added tax. As a matter of course, segment information is based on the same principles of presentation and the same accounting poli- Derivative financial instruments and hedging instruments cies as those applied to the consolidated financial statements. Derivative financial instruments are used solely for hedging Receivables, liabilities, revenues and expenses as well as profit purposes in order to mitigate currency and interest rate risks /loss between the individual segments are eliminated as part of arising from operating business. Under IAS 39, all derivative reconciliation. Internal transfer pricing between the business financial instruments, such as interest rate, currency and for- segments is determined on the basis of competitive market eign exchange forward contracts as well as currency options, prices charged to unaffiliated third parties (regular way transac- are to be carried at fair value, irrespective of the purpose such tion). External sales revenue relates to the country in which transactions have been entered into by the entity. the customer is domiciled. Capital expenditure relates to additions to intangible assets as well as property, plant and equip- The derivative financial instruments do not fulfil the restrictive ment. Segment assets and segment liabilities comprise assets requirements of IAS 39 applying to the recognition of hedging and liabilities that contribute to the achievement of operating relationships. Therefore, gains and losses arising from a change profit. Amortisation and depreciation of non-current assets in the fair value of derivative financial instruments are recog- relate to both intangible assets and property, plant and equip- nised immediately in profit or loss. ment.

The fair value of derivative financial instruments is calculated The following tables include information relating to revenues on the basis of market data and generally accepted valuation and profit or loss as well as specific information regarding methodologies. The market changes associated with derivative assets and liabilities of the segments. The differences in financial instruments are reported in net finance cost/income. respect of the consolidated financial statements are presented in the reconciliation. COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 51 Notes

SEGMENT INFORMATION BY REGION

Rest of Europe Asia, Americas Germany Europe and Africa and Australia Eliminations Group in € ’000 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 Revenue from sales to external customers 93,122 104,624 146,059 151,978 54,049 51,897 0 0 293,230 308,499 Revenue from sales to other segments 18,516 20,560 46,695 51,754 12,879 13,230 –78,090 –85,544 0 0 Segment revenue 293,230 308,499

Segment result 6,749 11,069 7,400 8,981 –329 –246 13,820 19,804 Segment assets 124,567 124,174 34,935 32,091 38,933 40,295 198,435 196,560 of which non-current 55,727 55,857 14,367 11,203 21,960 23,449 92,053 90,509 Segment liabilities 57,105 62,112 8,665 3,780 3,619 5,053 69,389 70,945 Segment capital expenditure 8,571 6,035 4,102 970 1,002 5,684 13,675 12,689 Amortisation/depreciation 8,262 9,229 1,203 1,106 1,971 1,596 11,436 11,931

A reconciliation between segment assets, segment liabilities and segment profit/loss and current and non-current assets and liabilities as well as earnings before taxes is presented below:

RECONCILIATION in € ’000 31/12/2012 31/12/2011 in € ’000 2012 2011 Segment assets 198,435 196,560 Segment result 13,820 19,804 Other financial assets 20,994 30,227 Income from equity investments 600 650 Cash and cash equivalents 36,934 26,139 Interest income 630 659 Non-current tax assets 2,612 3,205 Interest expense 284 392 Current tax assets 750 752 Profit before taxes 14,766 20,721 Deferred tax assets 372 174 Financial assets 23 23 Current and non-current assets 260,120 257,080 SEGMENT INFORMATION RELATING TO PRODUCT GROUPS

in € ’000 2012 2011 in € ’000 31/12/2012 31/12/2011 Sales revenue from Segment liabilities 69,389 70,945 external customers Deferred tax liabilities 4,134 5,187 Semi-finished and finished parts 215,009 229,422 Income tax liabilities 1,960 1,153 Pipes and fittings 78,221 79,077 Non-current financial liabilities 66 4,728 Total 293,230 308,499 Current financial liabilities 3,812 312 Derivative financial instruments 78 123 Current and non-current liabilities 79,439 82,448 52

NOTES TO GROUP INCOME STATEMENT the rental agreements include options for the extension of rental periods. All rental and lease agreements are structured [7] SALES REVENUE as operating leases within the meaning of IAS 17.

Sales revenue is attributable solely to the sale of semi-finished Additionally, other operating expenses include expenses for plastics, pipes and fittings as well as finished parts. The classi outward freight amounting to € 12,535 thousand (prev. year: fication of sales revenue by region and product segment is out- € 12,629 thousand), maintenance expenses of € 9,679 thou- lined in segment reporting – Note [6]. sand (prev. year: € 9,513 thousand) and expenses for packag- ing material amounting to € 6,067 thousand (prev. year: € 6,508 thousand). [8] STAFF COSTS

STAFF COSTS [11] NET FINANCE INCOME in € ’000 2012 2011 Salaries and wages 45,029 45,914 in € ’000 2012 2011 Expenses relating to social security 9,868 10,379 Interest income 630 659 Expenses relating to pensions 2,715 2,327 of which from the measurement Total 57,612 58,620 of derivatives 44 35 of which from loans and receivables 586 624

[9] RESEARCH AND DEVELOPMENT EXPENSES in € ’000 2012 2011 Interest expense 284 392 The costs incurred as part of research and development activ of which from borrowings and financial liabilities 284 392 ities vary in nature and are recognised in the respective items of the Group income statement. Delineation of research and development costs from costs incurred when implementing customised product properties is not possible on a systematic [12] INCOME TAXES basis due to the same production processes applied in both areas. Research and development expenses are mainly com- The principal elements of income tax expense for the 2012 prised of staff costs, material costs and depreciation of prop- and 2011 financial years are as follows: erty, plant and equipment. GROUP INCOME STATEMENT in € ’000 2012 2011 [10] OTHER OPERATING EXPENSES Current tax Current tax expense 4,659 5,425 Other operating expenses include expenses relating to rental Adjustments of current tax attributable to previous periods 6 –305 and lease agreements amounting to € 2,207 thousand in the Income from measurement of credits financial year under review (prev. year: € 2,135 thousand). The for the reduction of corporation tax –147 –170 expenses are attributable mainly to the rental of dispatch ware- Deferred tax houses and production facilities. The rental agreements have Origination and reversal of temporary differences –1,251 –468 various contractual maturities (usually 3 to 15 years); some of Income tax expense reported in Group income statement 3,267 4,482 COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 53 Notes

Reconciliation between income tax expense and the product of Deferred tax profit for the year carried in the statement of financial posi- The deferred tax liabilities and assets for the period under tion and the tax rate applicable to the Group for the 2012 and review are outlined below: 2011 financial years is as follows: Group statement of Group income in € ’000 2012 2011 financial position statement Profit before taxes 14,766 20,721 31/12/ 31/12/ Income tax expense at German tax in € ’000 2012 2011 2012 2011 rate of 29.48 % (prev. year: 29.13 %) 4,353 6,036 Deferred tax liabilities Adjustments of current tax attributable Non-current assets 6,825 7,291 –466 –467 6 –305 to previous periods Inventories 3,487 3,446 41 415 Income from measurement of credits Receivables and –147 –170 for the reduction of corporation tax other assets 262 344 –82 83 Unrecognised deferred tax assets Other provisions 425 582 relating to tax losses and liabilities 208 18 190 0 Loss carryforwards used in connection Other items 3 0 3 0 with deferred tax assets not recognised in previous year –267 –102 10,785 11,099 –314 31 Capitalisation of deferred tax assets Deferred tax assets relating to tax losses –192 –65 Provisions for pensions 4,629 4,692 63 –66 Tax effect of non-deductible expenses 68 58 Other provisions Tax rate differences –154 –574 and liabilities 229 266 37 127 Tax-free dividend income –122 –277 Inventories 416 469 53 –14 Other tax-free income –6 0 Receivables and other assets 22 0 –22 0 Capitalisation of deferred tax assets relating to foreign tax credits as well Loss carryforwards as use thereof –1,068 –833 and tax credits 1,564 537 –1,027 –490 Other 311 132 Other items 138 122 –16 –56 Income tax expense at effective tax Non-current assets 25 0 –25 0 rate of 22.13 % (prev. year: 21.63 %) 3,267 4,482 7,023 6,086 –937 –499 Income tax expense reported in the after set-off: Group income statement 3,267 4,482 Deferred tax assets 372 174 Deferred tax liabilities –4,134 –5,187 At 31 December 2012, the potential credit for the reduction of Deferred tax income –1,251 –468 corporation tax, which results from the provisions set out in Section 37 and 38 KStG and is to be disclosed in accordance At the end of the reporting period, loss carryforwards amounted with IAS 12.82A, was € 3,696 thousand (prev. year: € 4,435 to € 15,715 thousand (prev. year: € 15,906 thousand). Deferred thousand). In the period under review, the credit for the reduc- tax assets of € 192 thousand (prev. year: € 65 thousand) were tion of corporation tax was measured at the present value recognised for € 667 thousand (prev. year: € 261 thousand) of of € 3,331 thousand (prev. year: € 3,923 thousand). Payouts in the loss carryforwards mentioned above. Beyond this, no other connection with the corporation tax credit will be made in five deferred tax assets were recognised, as the losses may not be remaining identical annual instalments of € 739 thousand p. a. used for the purpose of set-off with the taxable profit of other in the period from 2013 to 2017. To the extent that these pay- Group companies. Furthermore, the loss carryforwards are attrib- ments do not fall due within one year, the items are accounted utable to subsidiaries that have incurred losses over a period of for in the statement of financial position as non-current assets. several years, and at present there is no reasonably reliable indi- Payments due within one year are carried as current assets. cation that the earnings situation of these entities will improve 54

so significantly in the short term that future taxable profit will be No transactions with ordinary shares occurred between the end available against which the unused tax losses can be utilised. of the reporting period and the preparation of the consolidated financial statements.

Expiry date of tax loss carryforwards: [14] PAID AND PROPOSED DIVIDENDS in € ’000 2012 2011 Between 3 and 20 years 15,400 14,874 During the financial year a dividend, attributable to the ordinary Indefinite carryforward 315 1,032 shares of the parent company, in the amount of € 9.50 per 15,715 15,906 share was declared and distributed. The total payment made in the financial year under review amounted to € 5,700 thousand The distribution of dividends by the Group to shareholders has/ (prev. year: € 3,900 thousand). had no implications relating to income taxes in 2012 or 2011. A dividend proposal of € 7.50 per share (prev. year: € 9.50 per share) will be submitted to the Annual General Meeting of [13] EARNINGS PER SHARE Shareholders. The proposed total dividend was not recognised as a liability at the end of the reporting period. The corres For the calculation of basic earnings per share, the profit or loss ponding payment would total € 4,500 thousand (prev. year: attributable to ordinary equity holders of the parent entity shares € 5,700 thousand). is divided by the weighted average number of ordinary shares outstanding during the year. There were no dilutive effects in the 2012 or 2011 reporting periods.

The following table presents the amounts relevant to the calculation of basic and diluted earnings per share: in € ’000 or units of 1,000 2012 2011 Profit or loss attributable to ordinary shareholders of the parent company 11,442 16,177 Weighted average number of ordinary shares (without treasury shares) for the purpose of calculating basic earnings per share 600 600 Dilutive effects 0 0 Weighted average number of ordinary shares (without treasury shares) for the purpose of calculating diluted earnings per share 600 600 Basic earnings per share (in euro) 19.07 26.96 Diluted earnings per share (in euro) 19.07 26.96 COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 55 Notes

NOTES TO THE GROUP STATEMENT OF FINANCIAL POSITION

[15] INTANGIBLE ASSETS

31 DECEMBER 2012 31 DECEMBER 2011 Patents and Patents and in € ’000 licences Goodwill Total in € ’000 licences Goodwill Total Balance at 1 January 2012 Balance at 1 January 2011 (Cost of purchase/conversion, (Cost of purchase/conversion taking into account accumu- taking into account accumulated amortisation and impair- lated amortisation and impairments) 1,137 143 1,280 ments) 1,151 143 1,294 Additions 136 0 136 Additions 173 0 173 Disposals –14 0 –14 Disposals –11 0 –11 Amortisation during the Amortisation during the financial year –222 0 –222 financial year –228 0 –228 Effects of changes in foreign Effects of changes in foreign currency exchange rates -5 0 –5 currency exchange rates 52 0 52 Balance at 31 December 2012 Balance at 31 December 2011 (Cost of purchase/conversion, (Cost of purchase/conversion, taking into account accumu- taking into account accumulated amortisation and impair- lated amortisation and impairments) 1,032 143 1,175 ments) 1,137 143 1,280

Balance at 1 January 2012 Balance at 1 January 2011 Cost of purchase/conversion Cost of purchase/conversion (gross carrying amount) 8,169 143 8,312 (gross carrying amount) 8,592 143 8,735 Accumulated amortisation –7,032 0 –7,032 Accumulated amortisation –7,441 0 –7,441 Carrying amount 1,137 143 1,280 Carrying amount 1,151 143 1,294

Balance at 31 December 2012 Balance at 31 December 2011 Cost of purchase/conversion Cost of purchase/conversion (gross carrying amount) 7,895 143 8,038 (gross carrying amount) 8,169 143 8,312 Accumulated amortisation –6,863 0 –6,863 Accumulated amortisation –7,032 0 –7,032 Carrying amount 1,032 143 1,175 Carrying amount 1,137 143 1,280

In accordance with the method applied in the previous year, patents and licences are amortised systematically over their economic life of three to five years by using the straight-line method. 56

[16] PROPERTY, PLANT AND EQUIPMENT

31 DECEMBER 2012 31 DECEMBER 2011 Land and Plant and Land and Plant and in € ’000 buildings equipment Total in € ’000 buildings equipment Total Balance at 1 January 2012 Balance at 1 January 2011 (Cost of purchase/conversion, (Cost of purchase/conversion, taking into account accumu- taking into account accumulated depreciation and impair- lated depreciation and impairments) 32,470 56,759 89,229 ments) 33,387 54,739 88,126 Additions 3,321 10,218 13,539 Additions 485 12,031 12,516 Disposals 0 –700 –700 Disposals –28 –430 –458 Depreciation during the Depreciation during the financial year –1,731 –9,483 –11,214 financial year –1,721 –9,982 –11,703 Effects of changes in foreign Effects of changes in foreign currency exchange rates –33 58 25 currency exchange rates 347 401 748 Balance at 31 December 2012 Balance at 31 December 2011 (Cost of purchase/conversion, (Cost of purchase/conversion, taking into account accumu- taking into account accumulated depreciation and impair- lated depreciation and impairments) 34,027 56,852 90,879 ments) 32,470 56,759 89,229

Balance at 1 January 2012 Balance at 1 January 2011 Cost of purchase/conversion Cost of purchase/conversion (gross carrying amount) 63,167 202,587 265,754 (gross carrying amount) 62,384 198,595 260,979 Accumulated depreciation Accumulated depreciation and impairments –30,697 –145,828 –176,525 and impairments –28,997 –143,856 –172,853 Carrying amount 32,470 56,759 89,229 Carrying amount 33,387 54,739 88,126

Balance at 31 December 2012 Balance at 31 December 2011 Cost of purchase/conversion Cost of purchase/conversion (gross carrying amount) 66,333 210,614 276,947 (gross carrying amount) 63,167 202,587 265,754 Accumulated depreciation Accumulated depreciation and impairments –32,306 –153,762 –186,068 and impairments –30,697 –145,828 –176,525 Carrying amount 34,027 56,852 90,879 Carrying amount 32,470 56,759 89,229

The useful life of the assets was estimated as follows:

Buildings 20 – 40 years Plant and equipment 5 – 20 years

Other operating income includes gains of € 148 thousand (prev. year: € 102 thousand) from the disposal of property, plant and equipment; other operating expense includes losses of € 49 thousand (prev. year: € 356 thousand) from the disposal of property, plant and equipment. COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 57 Notes

[17] INVENTORIES The changes to valuation allowances for trade receivables are outlined below: in € ’000 31/12/2012 31/12/2011 in € ’000 31/12/2012 31/12/2011 Raw material and supplies 19,129 19,004 Balance of specific allowances at Finished goods and merchandise 37,803 38,279 1 January 1,568 1,151 Inventories 56,932 57,283 Exchange differences +10 +2 Allocated +295 +481 Utilised –5 +40 In the 2012 financial year inventory impairments fell by Reversed –192 –106 € 53 thousand to € 3,253 thousand compared to 31 December Balance of specific allowances at 2011. The cost of materials includes expenses relating to raw 31 December 1,676 1,568 materials and supplies in the amount of € 163,212 thousand (prev. year: € 176,137 thousand). The following table includes expenses attributable to the derecognition of trade receivables as well as income from amounts received in connection with derecognised trade receivables. [18] TRADE RECEIVABLES Expenses attributable to the derecognition of trade receivables are reported as other operating expenses, while income attribut- Trade receivables are not interest-bearing and are generally due able to amounts received in connection with derecognised within 30 to 90 days. trade receivables is accounted for as other operating income. in € ’000 31/12/2012 31/12/2011 in € ’000 2012 2011 Carrying amount 43,283 42,606 Expenses attributable to the of which not impaired at the reporting derecognition of trade receivables 94 37 date and past due within the following Income attributable to amounts time ranges received in connection with up to 30 days 4,066 4,080 derecognised trade receivables 52 24 between 31 and 60 days 1,813 1,026 between 61 and 90 days 431 420 between 91 and 120 days 129 559 more than 120 days 1,895 1,731

As regards the trade receivables that were neither impaired nor past due, there were no indications at the end of the reporting period that customers will fail to meet their payment obligations.

[19] NON-CURRENT TAX ASSETS AS WELL AS OTHER has a notional interest of € 25.83 in the company’s share capi- ASSETS AND PREPAID EXPENSES tal. The ordinary shares have been issued and fully paid in.

OTHER ASSETS AND PREPAID EXPENSES in € ’000 31/12/2012 31/12/2011 Share capital 15,500 15,500 in € ’000 31/12/2012 31/12/2011 Issued capital 15,500 15,500 Other receivables 5,764 6,051 Receivables from other long-term investees and investors 300 69 Other reserves Prepaid expenses 852 794 Other assets and prepaid expenses 6,916 6,914 in € ’000 31/12/2012 31/12/2011 Other receivables include reimbursement rights in respect of Currency translation effects 224 –45 sales tax as well as receivables relating to energy tax. At the Other reserves 224 –45 end of the reporting period, other assets were neither impaired nor past due. Other reserves include currency translation effects attributable to exchange differences occurring upon translation of the finan- Non-current tax assets include the due reimbursement right in cial statements of foreign subsidiaries. respect of credits for the reduction of corporation tax relating to SEStEG that is not due within one year. [22] FINANCIAL LIABILITIES

[20] CASH AND CASH EQUIVALENTS in € ’000 Due date 31/12/2012 31/12/2011 in € ’000 31/12/2012 31/12/2011 Current liabilities Bank balances and cash on hand 36,934 26,139 Loan of USD 5 million (nominal amount) 12/2013 3,789 0 Cash and cash equivalents 36,934 26,139 Pro-rata loan of USD 3 million (principal repayments due by 31/12/2013) 09/2013 0 257 Bank balances bear interest on the basis of floating interest Pro-rata loan of USD 210 rates applicable to balances payable on demand. thousand (principal repay- 01/2013 ments due by 31/12/2013) – 12/2013 23 23 At 31 December 2012, the Group had undrawn borrowing facili- Liabilities from deferred interest attributable to USD loans 03/2012 ties of € 8,516 thousand (prev. year: € 8,546 thousand). (current liabilities) – 06/2012 0 32 Bank overdrafts on demand 0 0 3,812 312 [21] EQUITY Non-current liabilities Loan of USD 5 million Changes in equity are presented in a separate statement of (nominal amount) 12/2013 0 3,864 changes in equity. Pro-rata loan of USD 3 million (principal repayments due 09/2014 after 31/12/2013) – 09/2015 0 773 Issued capital Pro-rata loan of USD 210 As at 31 December 2012, the share capital of SIMONA AG was thousand (principal repay 01/2014 divided into 600,000 no-par-value shares. These shares are ments due after 31/12/2013) – 10/2016 66 91 classified as ordinary bearer shares. Each no-par-value share 66 4,728 COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 59 Notes

Fixed or floating interest rates of between 4.9 per cent and The changes in the liability of defined benefit obligations are 6.8 per cent have been agreed in respect of the interest-bear- as follows: ing loans. Interest is computed either on the basis of the nominal value of the loan or the remaining amount of the loan. in € ’000 31/12/2012 31/12/2011 Obligation at beginning of reporting period 40,638 39,570 SIMONA AG, Kirn, issued absolute suretyships in respect of Current service cost 997 863 loans for the benefit of its subsidiaries. Interest cost 1,769 1,655 Actuarial gain –51 –191 Benefits paid –1,663 –1,259 [23] PENSIONS Obligations at end of reporting period 41,688 40,638 – of which non-current liability 40,231 39,311 The majority of employees within the SIMONA Group are – of which current liability 1,457 1,327 entitled to post-employment benefits attributable to pension plan agreements. The aforementioned plans are structured The Group anticipates expenses of € 3,055 thousand in as final salary pension plans in the case of both personnel connection with defined benefit pension plans for the 2013 employed on the basis of collective wage agreements and financial year. managerial staff, including members and former members of the Management Board. With the exception of payments to Actuarial gains and losses are offset in profit or loss to SIMONA Sozialwerk GmbH (cf. Note [24]), no contributions are the extent that they exceed the 10 per cent corridor. As from made to funds. the subsequent period, the portion of actuarial gains and losses exceeding this corridor is offset over the future average The following table includes a breakdown of the expense items remaining working life of the employees. recognised in the Group income statement in connection with retirement benefits as well as the amounts carried in the state- LIABILITIES ATTRIBUTABLE TO DEFINED BENEFIT OBLIGATIONS ment of financial position for the respective plans. in € ’000 31/12/2012 31/12/2011 Present value of defined benefit Expenses included in staff costs for retirement benefits: obligation 48,488 36,160 Unrecognised actuarial losses (prev. year: gains) attributable to the in € ’000 2012 2011 obligation –6,800 4,478 Current service cost 997 863 Liabilities attributable to defined Interest cost 1,769 1,655 benefit obligations 41,688 40,638 Actuarial gain –51 –191 Cost of retirement benefits 2,715 2,327 The present values of the defined benefit obligations of the current and the previous four annual reporting periods are as follows:

in € ’000 2012 2011 2010 2009 2008 Present value of defined benefit obligations –48,488 –36,160 –32,946 –34,022 –32,826 60

The assumptions made for the purpose of determining the in € ’000 31/12/2012 31/12/2011 pension obligations are as follows: Present value of defined benefit plans at the beginning of the year 37,231 30,412 31/12/2012 31/12/2011 Current service cost 1,409 1,271 Discount rate 3.50 % 5.00 % Actuarial gains/losses 12,755 4,670 Salary increase 2.50 % 2.50 % Interest cost 1,838 1,627 Pension adjustments 1.87 % 1.87 % Benefits paid –864 –749 Mortality (mortality tables published Present value of defined benefit plans by K. Heubeck) 2005 G 2005 G at the end of the year 52,369 37,231

Market value of fund assets at the beginning of the year 41,139 39,208 [24] COMPANY WELFARE INSTITUTIONS Disposals of financial assets –864 –749 Return on fund assets –43 2,680 Market value of fund assets at the SIMONA Sozialwerk GmbH is structured as a long-term end of the year 40,232 41,139 employee benefit fund within the meaning of IAS 19.7. Under the Articles of Association, the entity operates solely for the Deficit/surplus –12,137 3,908 purpose of ensuring that former employees of SIMONA AG as Unrecognised actuarial (gains)/losses 17,371 4,670 well as their dependants receive retirement benefits. The bene- (Liability)/asset from defined ficiaries of pensions are entitled to all the assets belonging benefit plan 5,234 8,578 to the entity as well as all income derived from these assets while the entity is in existence as well as in the case of liquida- As regards the basic assumptions for determining the pension tion or insolvency of the entity. SIMONA AG has no access obligations, please refer to the details in Note [23]. rights to assets held by SIMONA Sozialwerk GmbH. In the event of liquidation of the entity, the entity’s assets are to be allo- The surplus relating to plan assets is not accounted for in the cated to the recipients of benefits or are to be secured for the consolidated financial statements of SIMONA AG, as SIMONA purpose of providing future benefits for said recipients. Thus, AG has no control over these assets. In accordance with the even in the event that SIMONA AG becomes insolvent, the cred- provisions set out in IAS 19.7, the plan assets are available itors identified in connection with insolvency have no rights in to be used only to pay or fund employee benefits. The deficit respect of the assets of SIMONA Sozialwerk GmbH. as at 31 December 2012 is attributable primarily to the decline in interest rates. Owing to the final application of the The assets of SIMONA Vermögensverwaltungsgesellschaft corridor method, the actuarial losses remain unrecognised, as der Belegschaft mbH may be utilised solely for benefit-related a result of which no liability was recognised. As regards the purposes relating to SIMONA Sozialwerk GmbH. transitional effects relating to the new application of IAS 19R “Employee Benefits”, which will be seen on first-time appli cation in the financial year 2013, please refer to section [3.2] of the notes.

The fair value of the plan assets includes shares in SIMONA AG with a fair value of € 18,420 thousand (prev. year: € 19,662 thousand) as at 31 December 2012. COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 61 Notes

The amounts of the defined benefit obligations and the plan At the reporting date, obligations in connection with agreements assets relating to the current and the four previous annual regarding part-time employment of staff approaching retirement reporting periods are as follows: amounted to € 2,375 thousand (prev. year: € 3,099 thousand). This item is composed of obligations for performance-related in € ’000 2012 2011 2010 2009 2008 arrears, additional compensation and severance payments. Present value of defined benefit Provisions for guarantees are recognised in connection with obligations –52,369 –37,231 –30,412 –28,500 –27,327 warranties for products sold in preceding years. Guarantee- Fair value related provisions at SIMONA AG are recognised for ongoing, of plan assets 40,232 41,139 39,208 38,597 39,074 regularly occurring warranty cases as well as for individual –12,137 3,908 8,796 10,097 11,747 cases that occur on an irregular basis and are associated with the risk of above-average claims.

[25] OTHER PROVISIONS As regards regularly occurring warranty cases, a provision is calculated on the basis of experience over what is adjudged Personnel- to be a probable average claim period of 5 years. For the related Guarantees/ in € ’000 obligations warranties Others Total purpose of measuring the provision, the expenses actually Balance at incurred in connection with customer credits/refunds 1 January 2012 3,982 3,707 6 7,695 from warranty obligations as well as the thus resulting direct Allocated 423 50 68 541 costs of processing a complaint are analysed in detail. Used 774 29 0 803 Within this context, the weighted average warranty expense Reversed 79 366 0 445 of the past 5 years is used for calculation purposes. Compounding 0 30 0 30 Balance at 31 December 2012 3,552 3,392 74 7,018 The portion of warranty provisions calculated in respect of individual cases occurring on an irregular basis is recognised Short-term only when the utilisation of the provision is considered likely, provisions 1,210 748 66 2,024 a payment relating thereto is deemed probable and a reliable Long-term provisions 2,342 2,644 8 4,994 estimate can be made. Balance at 31 December 2012 3,552 3,392 74 7,018 The portion of the warranty provision whose utilisation is not due within one year after the reporting date is discounted. Short-term provisions 1,430 815 0 2,245 Long-term provisions 2,552 2,892 6 5,450 [26] STATEMENT OF CASH FLOWS Balance at 31 December 2011 3,982 3,707 6 7,695 The statement of cash flows presents changes to cash and cash equivalents during the financial year by outlining cash Personnel-related provisions encompass obligations in inflows and outflows. In accordance with IAS 7, the statement connection with agreements regarding part-time employment of cash flows includes information relating to cash flows from of staff approaching retirement and provisions relating to operating activities, investing activities and financing activities. anniversaries. Personnel-related provisions are measured on the basis of actuarial figures. 62

As at 31 December, total cash and cash equivalents, together Roland Frobel, Isernhagen, with current financial liabilities, were as follows: Managing Director of Dirk Rossmann GmbH, Burgwedel Deputy Chairman (since 22 June 2012) in € ’000 31/12/2012 31/12/2011 Member of the Supervisory Board of Deutsche Beteiligungs Cash and cash equivalents 36,934 26,139 AG, Frankfurt am Main Current financial liabilities (excluding Chairman of the Advisory Board of Saxonia Holding GmbH, liabilities attributable to loans) 0 –32 36,934 26,107 Wolfsburg Dr. Roland Reber, Stuttgart The effects of changes to cash and cash equivalents attributa- Managing Director of Ensinger GmbH, Nufringen ble to exchange rates were € 287 thousand (prev. year: € 167 Dr. Horst Heidsieck, Büdingen thousand) at Group level. (from 22 June 2012 to 30 November 2012) Managing Partner of Value Consult Management- und Cash flows from investing and financing activities are accoun Unternehmensberatungsgesellschaft mbH, Büdingen ted for directly, i.e. on a payments basis. Cash flows from Managing Partner of DOMINO GmbH, Büdingen operating activities are determined indirectly on the basis of Chairman of the Supervisory Board of Coperion GmbH, earnings before taxes, i. e. via changes to the Group state- Stuttgart ment of financial position, having accounted for the effects of Member of the Supervisory Board of HOMAG AG, Schopfloch currency translation. Bernd Meurer, Hennweiler, Employee Representative (until 28 February 2012) Gerhard Flohr, Bergen [27] RELATED PARTY DISCLOSURES Employee Representative (since 28 February 2012) Andreas Bomm, Schmidthachenbach Entities and persons with control over the SIMONA Group, as Employee Representative (since 28 February 2012) well as associated entities and persons, including close members of the family and intermediate entities, with significant Dirk Möller is a shareholder (11.64 per cent of shares in influence over the financial and operating policies of the SIMONA SIMONA AG) and a member of the Management Board Group are to be disclosed in accordance with IAS 24. of SIMONA AG. Additionally, Dirk Möller performs executive or controlling duties within the individual companies of Management Board the SIMONA Group. Wolfgang Moyses, Chairman, Kirn SIMONA Plast-Technik s.r.o., Litvinov, (1), Dirk Möller, Deputy Chairman, Kirn SIMONA AMERICA Inc., Hazleton, (2), Fredy Hiltmann, Kirn (since 1 January 2012) SIMONA FAR EAST Ltd., Hong Kong, (2), SIMONA ENGINEERING PLASTICS TRADING Co. Ltd., Supervisory Board Shanghai, (2), Hans-Werner Marx, Kirn, SIMONA ASIA Ltd., Hong Kong, (2), Kaufmann SIMONA ENGINEERING PLASTICS (Guangdong) Co. Ltd., Chairman (until 22 June 2012) Jiangmen, (2) Dr. Rolf Goessler, Bad Dürkheim Diplom-Kaufmann The duties as an executive or controlling body are as follows: Chairman (since 22 June 2012) (1) Managing Director/General Manager, Deputy Chairman (until 22 June 2012) (2) Member of the Board of Directors Member of the Supervisory Board of J. Engelsmann AG, Ludwigshafen COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 63 Notes

Dr. Roland Reber, member of the Supervisory Board of SIMONA 1 January 2013; (prev. year: € 473 thousand). Compensa- AG, is also the Managing Director of Ensinger GmbH; Nufringen. tion of former Management Board members and their surviv- The two entities maintain business relations with each other ing dependants amounted to € 440 thousand (prev. year: on arm’s length terms. In the financial year under review, prod- € 406 thousand). uct sales amounting to € 900 thousand were transacted between SIMONA AG and the entities of the Ensinger Group. Supervisory Board compensation for 2012 amounted to € 136 thousand (prev. year: € 118 thousand). Supervisory Board com- Beyond this, companies of the SIMONA Group entered into no pensation encompasses no variable components. significant transactions with members of the Management Board or the Supervisory Board of SIMONA AG and/or entities to which these persons have been appointed in an executive [28] FINANCIAL RISK MANAGEMENT OBJECTIVES AND or controlling capacity. This also applies to close family mem- POLICIES bers of the aforementioned persons. Principles of risk management As part of its ordinary operating activities, SIMONA AG provides Some of the assets, liabilities and planned transactions various services for the subsidiaries included in the consoli- of SIMONA AG are exposed to risks associated with changes dated financial statements. Conversely, the respective Group to foreign exchange rates and interest rates. companies render services within the SIMONA Group in the context of their business purpose. These business transactions The principal aim of financial risk management is to mitigate relating to the supply of goods and the rendering of services risks attributable to ongoing operating and finance-related are made at market prices. transactions.

We received no mandatory notifications in the period under Depending on the risk, the aim is to restrict the level of associ- review. ated risk by means of derivative financial instruments and non-derivative hedging instruments. All hedging instruments Compensation of members of the Management Board and are used solely for the purpose of hedging cash flows. Supervisory Board Total compensation for the Management Board amounted to Interest-rate risk € 1,853 thousand (prev. year: € 1,512 thousand). It com- The financial instruments exposed to interest-rate risk include prised € 1,118 thousand (prev. year: € 839 thousand) in fixed- short-term bank overdrafts as well as a floating-rate US dollar level compensation and € 735 thousand (prev. year: € 673 loan. In the 2012 financial year, the interest-rate risk associ- thousand) in bonus payments. The company does not grant ated with these instruments was mitigated entirely by means loans to members of the Management Board. of interest rate derivatives (interest rate swaps), as was the case in the previous financial year. In accordance with IFRS 7, Post-employment benefits of € 9,081 thousand (prev. year: interest-rate risks are addressed in the form of sensitivity € 8,328 thousand) have been provisioned for active members analyses. These present the effects of changes in market inter- of the Management Board, former members of the Manage est rates on interest income, interest expense and items in ment Board and their surviving dependants. The allocation to the statement of financial position. As the interest rate deriva- provisions for active members of the Management Board tives (interest rate swaps) are not part of a hedging relation- was € 2,214 thousand, of which € 1,634 thousand was attrib- ship as described in IAS 39, changes are recognised directly in utable solely to the change in the applicable interest rate finance income or cost. of 5.00 per cent as at 1 January 2012 to 3.50 per cent as at 64

Had the market interest rate of the US dollar been 100 IFRS 7 requires entities to present risk on the basis of sensi- basis points higher or lower at 31 December 2012, the net tivity analyses. These analyses show how profit or loss and finance result would have been € 12 thousand higher and equity would have been affected by changes in the relevant € 13 thousand lower respectively. risk variable that were reasonably possible at the end of the reporting date. Exchange rate movements may occur in Had the market interest rate of the US dollar been 100 the case of primary financial instruments that are beyond basis points higher or lower at 31 December 2011, the net the hedged parameters or that are hedged by means of finan- finance result would have been € 22 thousand higher and cial derivatives in the form of forward foreign exchange trans- € 23 thousand lower respectively. actions or currency options.

Currency risks If, as at 31 December 2012, the euro had appreciated (depre- The SIMONA Group is exposed to risks associated with ciated) by 10 per cent against all other currencies, profit exchange rate fluctuations within the area of investing and before taxes would have been € 3,998 thousand lower (€ 4,887 financing activities. Risks attributable to foreign currencies thousand higher). are hedged to the extent that they affect the cash flows of the Group. The risk of exchange rate fluctuations associated The hypothetical effect on profit of minus € 3,998 thousand solely with the translation of assets and liabilities into the (plus € 4,887 thousand) is attributable to the following sensitiv- reporting currency of the consolidated financial statements ity to exchange rates: (euros) remains unhedged. Effect on profit € ’000 before taxes Effect on equity Exchange rate risks attributable to the finance area exist with EUR/USD –2,501 (3,058) –1,128 (1,379) regard to the origination of a US dollar loan in December 2008 EUR/GBP –219 (268) 0 0 for the benefit of an Asian subsidiary that was assumed by EUR/CHF –150 (183) 0 0 SIMONA AG in the financial year under review and is due in EUR/CZK 191 (–235) 0 0 December 2013. Intercompany receivables in US dollars EUR/PLN –151 (185) 0 0 exist in the corresponding amount. Therefore, the aggregate EUR/HKD –899 (1,100) 0 0 unhedged currency risk remains balanced. EUR/CNY –227 (277) 0 0 EUR/RUB –42 (51) 0 0 –3,998 (4,887) –1,128 (1,379) At an operating level, the respective entities within the Group conduct the majority of their business transactions in their functional currency. The parent company is responsible almost If, as at 31 December 2011, the euro had appreciated (depre- solely for managing transactions in foreign currencies and ciated) by 10 per cent against all other currencies, profit hedges these activities within specified parameters as part of before taxes would have been € 1,335 thousand lower (€ 1,631 treasury management. As at the reporting date, no foreign thousand higher). exchange forward contracts and currency options were used for the purpose of hedging currency risks associated with operat- The hypothetical effect on profit of minus € 1,335 thousand ing activities. (plus € 1,631 thousand) is attributable to the following sensitivity to exchange rates: COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 65 Notes

Effect on profit As at 31 December 2012, the maturity structures of payment € ’000 before taxes Effect on equity obligations relating to the financial liabilities of the Group EUR/USD –675 (824) –809 (989) were as follows. EUR/GBP –307 (375) 0 0 EUR/CZK 326 (–399) 0 0 More than in € ’000 Up to 1 year 2-5 years 5 years Total EUR/PLN –118 (144) 0 0 Financial liabilities 3,812 66 0 3,878 EUR/HKD –549 (671) 0 0 Trade payables 11,266 0 0 11,266 EUR/CNY –2 (3) 0 0 Other liabilities and EUR/RUB –10 (13) 0 0 deferred income 9,299 118 0 9,417 –1,335 (1,631) –809 (989) Financial liabilities 24,377 184 0 24,561

Credit risk As at 31 December 2011, the maturity structures of payment SIMONA AG is exposed to credit risk as part of its operating obligations relating to the financial liabilities of the Group were activities. Financial assets outstanding – principally trade as follows. receivables – are monitored on a decentralised basis, i. e. by More than each legally separate company within the Group. Depending in € ’000 Up to 1 year 2-5 years 5 years Total on the credit rating of the customer, receivables are subject Financial liabilities 547 5,031 0 5,578 to the risk of default, which is mitigated with the help of trade Trade payables 11,223 0 0 11,223 credit insurance. On average, around 60 per cent of sales reve- Other liabilities and nue generated by SIMONA AG, having factored in a deductible, deferred income 11,217 0 0 11,217 is safeguarded by a trade credit insurance policy. Receivables Financial liabilities 22,987 5,031 0 28,018 exposed to probable credit risk are identified and monitored on a regular basis; credit risk relating to such items is accounted As in the previous financial year, at 31 December 2012, for by means of specific allowances on an item-by-item basis. there were no foreign exchange forward contracts that would The maximum potential credit risk is limited to the net carrying result in amounts due to the entity or payment obligations. amount (less value-added tax) of the financial assets. The market valuation of interest rate swaps resulted in a net Liquidity risk payment obligation of € 78 thousand (prev. year: € 123 thou- In order to ensure solvency and maintain financial flexibility, the sand). Group continuously monitors liquidity levels associated with operating activities as well as anticipated payments attributable As in the previous financial year, at 31 December 2012, to commitments arising from capital investment orders of the there were no currency options that would result in amounts respective companies. Within this context, liquidity is identified due to the entity or payment obligations. and assessed with a separate tool. Capital management Alongside cash and cash equivalents amounting to € 36.9 mil- The primary objective of capital management within the Group lion, the SIMONA Group has undrawn borrowing facilities of is to ensure a high credit rating and maintain a healthy equity € 8.5 million. The Group’s objective is to maintain a well-judged ratio. balance between ongoing coverage of cash requirements and sustained flexibility through the utilisation of bank over- The Group manages its capital structure and makes adjust- drafts and loans. ments in response to changing economic conditions where such action is deemed appropriate. 66

[29] FINANCIAL INSTRUMENTS

The following table presents the carrying amounts and fair values of all financial instruments recognised by the Group.

Carrying amount Fair value in € ’000 31/12/2012 31/12/2011 31/12/2012 31/12/2011

Non-current financial assets Financial assets HtM 23 23 23 23 Current financial assets Other financial assets AfS 10,000 10,000 10,000 10,000 Cash and short-term deposits LaR 47,928 46,366 47,928 46,366 Trade receivables LaR 43,283 42,606 43,283 42,606

Financial liabilities Bank overdrafts FLAC 0 0 0 0 Other current financial liabilities FLAC 0 –32 0 –32 Loans FLAC –3,878 –5,008 –3,878 –5,008 Interest-rate swap FLHfT –78 –123 –78 –123 Trade payables FLAC –11,266 –11,223 –11,266 –11,223

Total by measurement category HtM 23 23 23 23 AfS 10,000 10,000 10,000 10,000 LaR 91,211 88,972 91,211 88,972 FLAC –15,144 –16,263 –15,144 –16,263 FLHfT –78 –123 –78 –123

(HtM = Held to Maturity, AfS = Available for Sale, LaR = Loans and Receivables, FLAC = Financial Liabilities Measured at Amortised Cost, FLHfT = Financial Liabilities Held for Trading)

The fair value of derivative financial instruments and loans Short-term deposits held as Loans and Receivables (LaR) was determined by discounting the expected future cash flows include fixed-term investments of € 10,994 thousand that are on the basis of the prevailing market rate of interest as well due between January and August 2013. as by applying option pricing models. Within this context, the calculation takes into account that the loans are subject to The following table presents the net gains and losses from floating or fixed interest rates on the basis of standard market subsequent measurement of financial instruments recognised terms and conditions. in the statement of financial position, listed according to the respective measurement categories: COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 67 Notes

2012: NET GAINS AND LOSSES BY MEASUREMENT CATEGORY The Group uses the following hierarchy for the purpose of deter- Impairment mining and disclosing the fair values of financial instruments per Currency loss/ measurement method: in € ’000 Interest Fair value translation Disposal Total J AfS 229 0 0 0 229 Level 1: quoted prices (unadjusted) in active markets for LaR 357 0 –486 –150 –279 identical assets or liabilities HfT 0 44 0 0 44 J Level 2: methods for which all inputs with a significant FLAC –312 0 0 0 –312 effect on the recognised fair value are observable either Total 274 44 –486 –150 –318 directly or indirectly J Level 3: methods that use inputs which have a significant 2011: NET GAINS AND LOSSES BY MEASUREMENT CATEGORY effect on the recognised fair value and are not based on Impairment observable market data Currency loss/ in € ’000 Interest Fair value translation Disposal Total AfS 228 0 0 0 228 Assets measured at fair value: LaR 396 0 939 –430 905 HfT 0 35 0 0 35 as at FLAC –368 0 0 0 –368 31 Decem- in € ’000 ber 2012 Level 1 Level 2 Level 3 Total 256 35 939 –430 800 Financial assets at fair value through profit or loss

Securities 10,000 0 10,000 0 Hedging transactions

Cash flow hedging instruments The securities disclosed above are a bonded loan. The bonded As at 31 December 2012 and 31 December 2011, the Group loan is due on 10 May 2013 at the latest, but can be can- held no forward currency contracts. celled by the lender at any time. The bonded loan bears interest based on the six-month EURIBOR rate plus a floating pre- At the reporting date, the Group had an interest-rate swap used mium. The floating premium amounted to 25 basis points and for the purpose of hedging risk arising from changes in the rises each half-year until it has reached 125 basis point at the cash flow of the floating-rate US dollar loan. The term is based end of maturity. on the underlying loan. as at 31 Decem- As at 31 December 2012 and 31 December 2011, the Group in € ’000 ber 2011 Level 1 Level 2 Level 3 held no currency options. Financial assets at fair value through profit or loss Securities 10,000 0 10,000 0 68

Liabilities measured at fair value: [30] OTHER INFORMATION

as at Subsidiaries 31 Decem- Alongside SIMONA AG as the parent, the consolidated financial in € ’000 ber 2012 Level 1 Level 2 Level 3 Financial liabilities statements include the following entities. Unless otherwise at fair value through specified, the ownership interest in the previous year was iden- profit or loss tical to that of the financial year under review. Interest-rate swap 78 0 78 0

OWNERSHIP INTEREST

as at in % 31 Decem- SIMONA Beteiligungs-GmbH, Kirn, Germany 100.0 in € ’000 ber 2011 Level 1 Level 2 Level 3 SIMONA UK Ltd., Stafford, United Kingdom 100.0 Financial liabilities SIMONA S.A.S., Domont, France 100.0 at fair value through profit or loss SIMONA S.r.l., Vimodrone, Italy 100.0 Interest-rate swap 123 0 123 0 SIMONA IBERICA SEMIELABORADOS S.L., Barcelona, Spain 100.0 SIMONA POLSKA Sp. z o.o., Wrocław, Poland 100.0 SIMONA-PLASTICS CZ, s.r.o., Prague, Czech Republic 100.0 SIMONA FAR EAST Ltd., Hong Kong, China 100.0 SIMONA AMERICA Inc., Hazleton, USA 100.0 SIMONA ENGINEERING PLASTICS TRADING Co. Ltd. Shanghai, China 100.0 SIMONA ASIA Ltd., Hong Kong, China 100.0 SIMONA ENGINEERING PLASTICS (Guangdong) Co. Ltd., Jiangmen, China 100.0 64 NORTH CONAHAN DRIVE HOLDING LLC, Hazleton, USA 100.0 DEHOPLAST POLSKA, Sp.z o.o., Kwidzyn, Poland 51.0 SIMONA Plast-Technik s.r.o., Litvinov, Czech Republic 100.0 OOO SIMONA RUS, Moscow, Russian Federation 100.0

There were no changes to the ownership interests held in subsidiaries in the financial year under review.

Financial assets SIMONA AG holds at least a one-fifth interest in the following entities, without being able to control or significantly influence the financial and operating policies of the entities in question. Unless otherwise specified, the ownership interest in the previous year was identical to that of the financial year under review. COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 69 Notes

Ownership Equity Profit/loss Contingent liabilities and other financial commitments interest 31/12/2011 2011 No provisions were recognised for the following contingent Company in % € ’000 € ’000 liabilities, carried at their nominal amounts, because the SIMONA Sozialwerk GmbH, probability of the occurrence of risk is considered to be low. Kirn, Germany 50.0 14,969 348 SIMONA Vermögensverwal- tungsgesellschaft der Beleg- in € ’000 31/12/2012 31/12/2011 schaft mbH, Kirn, Germany 50.0 6,906 528 Other financial commitments Commitments from operating rental and lease agreements Due within: Owing to its classification as a pension fund, SIMONA Sozial 1 year 955 1,391 werk GmbH is not included in the consolidated financial 2 – 5 years 1,219 2,285 statements, as specified in IAS 19.7. SIMONA Vermögensver after 5 years 0 0 waltungsgesellschaft der Belegschaft mbH is not included 2,174 3,676 in the consolidated financial statements because the assets of this entity may be utilised solely for funding purposes in Purchase commitments arising from respect of SIMONA Sozialwerk GmbH and thus remain outside investment projects 10,453 5,677 SIMONA AG’s scope of economic control. Declaration of Conformity regarding the German Corporate The interests in SIMONA Sozialwerk GmbH and SIMONA Governance Code Vermögensverwaltungsgesellschaft der Belegschaft mbH are In accordance with Section 161 AktG, the company filed a accounted for at book value, as the fair value is not reliably Declaration of Conformity for 2012 on 8 March 2013. determinable. The book values of SIMONA Sozialwerk GmbH It has been made permanently available to shareholders on and SIMONA Vermögensverwaltungsgesellschaft der Beleg its corporate website at www.simona.de. schaft mbH are € 10 thousand and € 13 thousand respectively.

Average number of staff employed in the financial year:

GROUP

2012 2011 Industrial staff 723 725 Clerical staff 478 473 1,201 1,198 School-leaver trainees (apprentices) 46 50 Total number of employees 1,247 1,248

Directors’ holdings – Shares held by members of the Management Board and the Supervisory Board of SIMONA AG As at 22 June 2012 (date of the Annual General Meeting of Shareholders) the members of the Management Board reported a total holding of 70,860 shares; this corresponds to approx. 11.81 per cent of the share capital of SIMONA AG. The members of the Supervisory Board reported holdings of 1,495 shares, which corresponds to 0.25 per cent of share capital.

In accordance with Section 15a of the Securities Trading Act (Wertpapierhandelsgesetz – WpHG), the members of the Supervisory Board and the Management Board, as well as related parties, are legally obliged to disclose all significant acquisitions or disposals of shares in SIMONA AG. In the period under review, the company was notified of no such transaction.

Audit fees The total fees invoiced by the independent auditor of SIMONA AG were € 278 thousand. These fees were attributable to the following items: year-end audit € 127 thousand, tax consulting services € 44 thousand and other services € 107 thousand.

Events after the reporting period No events occurred after the reporting date that would necessi- tate a change to measurements or recognised amounts.

Kirn, 28 March 2013 SIMONA Aktiengesellschaft

The Management Board COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 71 Notes Group Statement of Cash Flows

Group Statement of Cash Flows of SIMONA AG for the 2012 Financial Year

in € ’000 Notes 01/01 – 31/12/2012 01/01 – 31/12/2011

Profit before taxes 14,766 20,721 Income taxes paid –4,022 –4,135 Interest expense/income [11] –346 –267 Amortisation of intangible assets and depreciation of property, plant and equipment [15], [16] 11,436 11,931 Other non-cash expenses and income 95 –1,389 Change in pensions [23] 1,050 1,068 Result from disposal of non-current assets [16] –99 254 Change in inventories [17] 351 –6,768 Change in trade receivables [18] –677 –761 Change in other assets 591 3,601 Change in liabilities and other provisions –1,844 –833 Net cash from operating activities 21,301 23,422

Investments in intangible assets and property, plant and equipment [15], [16] –13,675 –12,689 Payments for the acquisition of interests in subsidiaries 0 –94 Proceeds/payments relating to the short-term financial management of cash investments 9,233 –20,227 Proceeds from the disposal of non-current assets 113 215 Net cash used in investing activities –4,329 –32,795

Repayment of financial liabilities –1,034 –280 Dividend paid to owners of the parent company [14] –5,700 –3,900 Dividend paid to non-controlling interests 0 –15 Interest received 586 624 Interest paid –284 –392 Net cash used in financing activities –6,432 –3,963

Effect of foreign exchange rate changes on liquidity [26] 287 167 Change in cash and cash equivalents [26] 10,827 –13,169

Cash and cash equivalents at 1 January [26] 26,107 39,276 Cash and cash equivalents at 31 December [26] 36,934 26,107 Change in cash and cash equivalents [26] 10,827 –13,169 72

Group Statement of Changes in Equity of SIMONA AG for the 2012 Financial Year

EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY NON-CONTROLLING TOTAL EQUITY INTERESTS

Issued capital Capital reserves Revenue reserves Other reserves Currency Statutory Other revenue Accumulated profit translation in € ’000 Share capital Total Legal reserve reserves reserves for the period Total differences

Notes [21] [21]

Balance at 01/01/2011 15,500 15,500 15,274 397 2,847 92,417 35,764 131,425 –260 272 162,211 Amount recognised directly in equity 0 0 0 0 0 0 0 0 215 –24 191 Profit for the period 0 0 0 0 0 0 16,177 16,177 0 62 16,239 Total comprehensive income for the period 0 0 0 0 0 0 16,177 16,177 215 38 16,430 Dividend payment [14] 0 0 0 0 0 0 –3,900 –3,900 0 0 –3,900 Distribution to non-Group parties 0 0 0 0 0 0 0 0 0 –15 –15 Other changes 0 0 0 0 0 0 0 0 0 –94 –94 Balance at 31/12/2011 15,500 15,500 15,274 397 2,847 92,417 48,041 143,702 –45 201 174,632

Balance at 01/01/2012 15,500 15,500 15,274 397 2,847 92,417 48,041 143,702 –45 201 174,632 Amount recognised directly in equity 0 0 0 0 0 0 0 0 269 –19 250 Profit for the period 0 0 0 0 0 0 11,442 11,442 0 57 11,499 Total comprehensive income for the period 0 0 0 0 0 0 11,442 11,442 269 38 11,749 Appropriations to other revenue reserves 0 0 0 0 0 4,204 –4,204 0 0 0 0 Dividend payment [14] 0 0 0 0 0 0 –5,700 –5,700 0 0 –5,700 Distribution to non-Group parties 0 0 0 0 0 0 0 0 0 0 0 Other changes 0 0 0 0 0 0 0 0 0 0 0 Balance at 31/12/2012 15,500 15,500 15,274 397 2,847 96,621 49,579 149,444 224 239 180,681 COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 73 Group Statement of Changes in Equity

EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY NON-CONTROLLING TOTAL EQUITY INTERESTS

Notes [21] [21]

Details of Shareholdings of SIMONA AG

Company Ownership interest Equity Profit/loss of last financial year

% € ’000 € ’000

Indirectly SIMONA S.A.S., Domont, France 100.0 2,940 392 SIMONA S.r.l., Vimodrone, ltaly 100.0 401 2 SIMONA UK Ltd., Stafford, United Kingdom 100.0 1,599 385 SIMONA IBERICA SEMIELABORADOS S.L., Barcelona, Spain 100.0 113 9 SIMONA ENGINEERING PLASTICS TRADING Co. Ltd., Shanghai, China 100.0 1,187 54 SIMONA ENGINEERING PLASTICS (Guangdong) Co. Ltd., Jiangmen, China 100.0 7,205 –1,056 64 NORTH CONAHAN DRIVE HOLDING LLC, Hazleton, USA 100.0 2,764 0

Directly SIMONA-PLASTICS CZ, s.r.o., Prague, Czech Republic 100.0 317 –55 SIMONA FAR EAST Ltd., Hong Kong, China 100.0 977 –187 SIMONA POLSKA Sp. z o.o., Wrocław, Poland 100.0 1,061 243 SIMONA Sozialwerk GmbH, Kirn (2011) 50.0 14,969 348 SIMONA Vermögensverwaltungsgesellschaft der Belegschaft mbH, Kirn (2011) 50.0 6,906 528 SIMONA Beteiligungs-GmbH, Kirn 100.0 1,834 0 SIMONA AMERICA Inc., Hazleton, USA 100.0 3,188 247 SIMONA Plast-Technik s.r.o., Litvinov, Czech Republic 100.0 15,208 1,488 SIMONA ASIA Ltd., Hong Kong, China 100.0 4,487 –459 DEHOPLAST POLSKA Sp. z o.o., Kwidzyn, Poland 51.0 508 128 OOO SIMONA RUS, Moscow, Russian Federation 100.0 –81 –39 COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 75 Details of Shareholdings Auditor’s Report

Auditor’s Report

We have issued the following audit opinion relating to the con- and the significant estimates made by the legal representa- solidated financial statements and Group management report: tives, as well as evaluating the overall presentation of the consolidated financial statements and the Group management “We have audited the consolidated financial statements of report. We believe that our audit provides a reasonable basis SIMONA Aktiengesellschaft, Kirn, – comprising the statement for our opinion. of financial position, the income statement, the statement of comprehensive income, the statement of changes in equity, Our audit has not led to any reservations. the statement of cash flows and the notes to the consolidated financial statements – together with the Group management In our opinion, based on the findings of our audit, the consoli- report for the financial year from 1 January to 31 December dated financial statements comply with IFRS, as adopted by 2012. The legal representatives of the Company are responsible the EU, and the additional requirements of German commercial for the preparation of the consolidated financial statements law pursuant to Section 315a(1) HGB and give a true and and the Group management report in accordance with IFRS, as fair view of the net assets, financial position and results of adopted by the EU, as well as in compliance with the addi- operations in accordance with these requirements. The Group tional provisions set out in Section 315a(1) of the German management report is consistent with the consolidated finan- Commercial Code (Handelsgesetzbuch – HGB). Our responsibil- cial statements and as a whole provides a suitable view of the ity is to express an opinion on the consolidated financial state- Group’s position and suitably presents the opportunities and ments and the Group management report based on our audit. risks of future development.”

We conducted our audit of the consolidated financial state- Eschborn/Frankfurt am Main, 30 March 2013 ments in accordance with Section 317 of the German Commer cial Code and in compliance with German generally accepted Ernst & Young GmbH standards for the audit of financial statements promulgated by Wirtschaftsprüfungsgesellschaft the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan and perform the audit such that misstate- von Seidel Grotenrath ments materially affecting the presentation of the net assets, German Public Auditor German Public Auditor financial position and results of operations in the consolidated financial statements in accordance with the applicable financial reporting framework and in the Group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the Group management report are examined primarily on a test basis within the framework of the audit. The audit also includes assessing the annual financial statements of those entities included in consolidation, the determination of the entities to be included in con solidation, the accounting and consolidation principles applied 76

Other Information

RESPONSIBILITY STATEMENT PURSUANT TO SECTIONS 297(2), 315(1) HGB

“To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the SIMONA Group, and the management report includes a fair review of the development and performance of the business and the position of the SIMONA Group, together with a description of the principal opportunities and risks associated with the expected development of the SIMONA Group.”

Kirn, 28 March 2013 SIMONA Aktiengesellschaft

The Management Board COMPANY GROUP MANAGEMENT REPORT GROUP FINANCIAL STATEMENTS OTHER DETAILS 77 Other Information Shareholdings

Shareholdings of SIMONA AG

SIMONA AG, KIRN

SIMONA Beteiligungs-GmbH SIMONA-PLASTICS CZ, s.r.o. Kirn, Germany 100.0 % Prag, Czech Republic 100.0 %

SIMONA S.A.S. SIMONA Plast-Technik s.r.o. Domont, France 100.0 % Litvinov, Czech Republic 100.0 %

SIMONA S.r.l. SIMONA POLSKA Sp. z o.o. Vimodrone, Italy 100.0 % Wrocław, Poland 100.0 %

SIMONA UK Ltd. DEHOPLAST POLSKA Sp. z o.o. Stafford, United Kingdom 100.0 % Kwidzyn, Poland 51.0 %

SIMONA IBERICA SEMIELABORADOS S.L. SIMONA AMERICA Inc. Barcelona, Spain 100.0 % Hazleton, USA 100.0 %

64 NORTH CONAHAN DRIVE HOLDING LLC Hazleton, USA 100.0 %

SIMONA Sozialwerk GmbH Kirn, Germany 50.0 %

SIMONA Vermögensverwaltungsgesellschaft der Belegschaft mbH SIMONA FAR EAST Ltd. Kirn, Germany 50.0 % Hong Kong, China 100.0 %

SIMONA ENGINEERING PLASTICS TRADING Co. Ltd. Shanghai, China 100.0 %

SIMONA ASIA Ltd. Hong Kong, China 100.0 %

SIMONA ENGINEERING PLASTICS (Guangdong) Co. Ltd. Jiangmen, China 100.0 %

OOO SIMONA RUS Moscow, Russian Federation 100.0 % 78

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Editor SIMONA AG Investor Relations Teichweg 16 D-55606 Kirn

Phone +49(0)6752 14-383 Fax +49(0)6752 14-738 [email protected] www.simona.de

Conceived and designed by kommunikation + design werbeagentur raab gmbh, Mainz www.komdes.de

Print Kern GmbH, Bexbach

Paper Hello Fat, FSC Financial Calendar 2013

SIMONA Group Consolidated Financial Statements and Financial Statements of SIMONA AG 24 April 2013

Annual Results Press Conference 2012 in Frankfurt 24 April 2013

Interim Announcement within the First Half of 2013 24 April 2013

Annual General Meeting in Kirn 7 June 2013

Group Interim Report for the First Half of 2013 7 August 2013

Interim Announcement within the Second Half of 2013 30 October 2013 SIMONA worldwide

Company sites SIMONA AG, KIRN Sales offices

SIMONA S.A.S. FRANCE OOO „SIMONA RUS“

SIMONA UK Ltd. SIMONA POLSKA Sp. z o.o.

SIMONA ENGINEERING PLASTICS SIMONA AMERICA INC. TRADING (Shanghai) Co. Ltd.

SIMONA FAR EAST Ltd.

SIMONA AG SIMONA AG SCHWEIZ SIMONA Plast-Technik s.r.o. Plant Ringsheim SIMONA-PLASTICS CZ, s.r.o.

SIMONA IBERICA SIMONA ENGINEERING PLASTICS SEMIELABORADOS S.L. SIMONA S.r.l. ITALIA (Guangdong) Co. Ltd. Plant China SIMONA Product Categories

PIPES, FITTINGS, VALVES

SHEETS, RODS, WELDING RODS

FINISHED PARTS, PROFILES SIMONA AG Investor Relations Teichweg 16 D-55606 Kirn

Phone +49 (0) 67 52 14-383 Fax +49 (0) 67 52 14-738 [email protected] www.simona.de